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CABGY or DEO: Which Is the Better Value Stock Right Now?

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Investors with an interest in Beverages - Alcohol stocks have likely encountered both Carlsberg AS (CABGY - Free Report) and Diageo (DEO - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. 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.

Currently, Carlsberg AS has a Zacks Rank of #2 (Buy), while Diageo has a Zacks Rank of #3 (Hold). This means that CABGY's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether 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.

CABGY currently has a forward P/E ratio of 17.88, while DEO has a forward P/E of 18.99. We also note that CABGY has a PEG ratio of 1.87. 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 3.33.

Another notable valuation metric for CABGY is its P/B ratio of 5.27. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, DEO has a P/B of 6.71.

These metrics, and several others, help CABGY earn a Value grade of B, while DEO has been given a Value grade of C.

CABGY sticks out from DEO in both our Zacks Rank and Style Scores models, so value investors will likely feel that CABGY is the better option right now.


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