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TXRH vs. WEN: Which Stock Should Value Investors Buy Now?
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Investors interested in stocks from the Retail - Restaurants sector have probably already heard of Texas Roadhouse (TXRH - Free Report) and Wendy's (WEN - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Texas Roadhouse and Wendy's are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that TXRH is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
TXRH currently has a forward P/E ratio of 22.60, while WEN has a forward P/E of 26.87. We also note that TXRH has a PEG ratio of 1.64. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. WEN currently has a PEG ratio of 2.77.
Another notable valuation metric for TXRH is its P/B ratio of 6.22. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, WEN has a P/B of 11.03.
These are just a few of the metrics contributing to TXRH's Value grade of B and WEN's Value grade of C.
TXRH is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that TXRH is likely the superior value option right now.
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TXRH vs. WEN: Which Stock Should Value Investors Buy Now?
Investors interested in stocks from the Retail - Restaurants sector have probably already heard of Texas Roadhouse (TXRH - Free Report) and Wendy's (WEN - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Texas Roadhouse and Wendy's are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that TXRH is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
TXRH currently has a forward P/E ratio of 22.60, while WEN has a forward P/E of 26.87. We also note that TXRH has a PEG ratio of 1.64. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. WEN currently has a PEG ratio of 2.77.
Another notable valuation metric for TXRH is its P/B ratio of 6.22. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, WEN has a P/B of 11.03.
These are just a few of the metrics contributing to TXRH's Value grade of B and WEN's Value grade of C.
TXRH is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that TXRH is likely the superior value option right now.