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ASBFY vs. UTZ: Which Stock Is the Better Value Option?

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Investors looking for stocks in the Food - Miscellaneous sector might want to consider either Associated British Foods PLC (ASBFY - Free Report) or Utz Brands (UTZ - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Associated British Foods PLC has a Zacks Rank of #2 (Buy), while Utz Brands has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that ASBFY has an improving earnings outlook. 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.

ASBFY currently has a forward P/E ratio of 13.88, while UTZ has a forward P/E of 30.86. We also note that ASBFY has a PEG ratio of 3.74. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. UTZ currently has a PEG ratio of 7.83.

Another notable valuation metric for ASBFY is its P/B ratio of 1.02. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, UTZ has a P/B of 1.52.

Based on these metrics and many more, ASBFY holds a Value grade of A, while UTZ has a Value grade of C.

ASBFY has seen stronger estimate revision activity and sports more attractive valuation metrics than UTZ, so it seems like value investors will conclude that ASBFY is the superior option right now.


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