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BUD or DEO: Which Is the Better Value Stock Right Now?
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Investors interested in stocks from the Beverages - Alcohol sector have probably already heard of Anheuser-Busch Inbev (BUD - Free Report) and Diageo (DEO - 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Anheuser-Busch Inbev has a Zacks Rank of #2 (Buy), while Diageo 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 BUD has an improving earnings outlook. But this is just one factor that value investors are interested in.
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 highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
BUD currently has a forward P/E ratio of 19.08, while DEO has a forward P/E of 21.16. We also note that BUD has a PEG ratio of 1.96. 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. DEO currently has a PEG ratio of 2.60.
Another notable valuation metric for BUD is its P/B ratio of 1.28. 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, DEO has a P/B of 8.58.
These metrics, and several others, help BUD earn a Value grade of A, while DEO has been given a Value grade of C.
BUD stands above DEO thanks to its solid earnings outlook, and based on these valuation figures, we also feel that BUD is the superior value option right now.
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BUD or DEO: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Beverages - Alcohol sector have probably already heard of Anheuser-Busch Inbev (BUD - Free Report) and Diageo (DEO - 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Anheuser-Busch Inbev has a Zacks Rank of #2 (Buy), while Diageo 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 BUD has an improving earnings outlook. But this is just one factor that value investors are interested in.
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 highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
BUD currently has a forward P/E ratio of 19.08, while DEO has a forward P/E of 21.16. We also note that BUD has a PEG ratio of 1.96. 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. DEO currently has a PEG ratio of 2.60.
Another notable valuation metric for BUD is its P/B ratio of 1.28. 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, DEO has a P/B of 8.58.
These metrics, and several others, help BUD earn a Value grade of A, while DEO has been given a Value grade of C.
BUD stands above DEO thanks to its solid earnings outlook, and based on these valuation figures, we also feel that BUD is the superior value option right now.