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ARCO or WEN: Which Is the Better Value Stock Right Now?
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Investors looking for stocks in the Retail - Restaurants sector might want to consider either Arcos Dorados (ARCO - Free Report) or Wendy's (WEN - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, Arcos Dorados has a Zacks Rank of #2 (Buy), while Wendy's has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that ARCO 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.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
ARCO currently has a forward P/E ratio of 14.02, while WEN has a forward P/E of 23.20. We also note that ARCO has a PEG ratio of 1.21. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. WEN currently has a PEG ratio of 2.36.
Another notable valuation metric for ARCO is its P/B ratio of 7.43. 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 10.99.
These metrics, and several others, help ARCO earn a Value grade of A, while WEN has been given a Value grade of C.
ARCO has seen stronger estimate revision activity and sports more attractive valuation metrics than WEN, so it seems like value investors will conclude that ARCO is the superior option right now.
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ARCO or WEN: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Retail - Restaurants sector might want to consider either Arcos Dorados (ARCO - Free Report) or Wendy's (WEN - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, Arcos Dorados has a Zacks Rank of #2 (Buy), while Wendy's has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that ARCO 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.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
ARCO currently has a forward P/E ratio of 14.02, while WEN has a forward P/E of 23.20. We also note that ARCO has a PEG ratio of 1.21. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. WEN currently has a PEG ratio of 2.36.
Another notable valuation metric for ARCO is its P/B ratio of 7.43. 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 10.99.
These metrics, and several others, help ARCO earn a Value grade of A, while WEN has been given a Value grade of C.
ARCO has seen stronger estimate revision activity and sports more attractive valuation metrics than WEN, so it seems like value investors will conclude that ARCO is the superior option right now.