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BJRI vs. YUMC: Which Stock Should Value Investors Buy Now?

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Investors interested in Retail - Restaurants stocks are likely familiar with BJ's Restaurants (BJRI - Free Report) and Yum China Holdings (YUMC - 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

BJ's Restaurants has a Zacks Rank of #2 (Buy), while Yum China Holdings has a Zacks Rank of #5 (Strong Sell) right now. This means that BJRI's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.

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.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

BJRI currently has a forward P/E ratio of 29.67, while YUMC has a forward P/E of 55.79. We also note that BJRI has a PEG ratio of 1.98. 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. YUMC currently has a PEG ratio of 5.91.

Another notable valuation metric for BJRI is its P/B ratio of 0.84. 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, YUMC has a P/B of 5.01.

These are just a few of the metrics contributing to BJRI's Value grade of A and YUMC's Value grade of F.

BJRI stands above YUMC thanks to its solid earnings outlook, and based on these valuation figures, we also feel that BJRI is the superior value option right now.


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BJ's Restaurants, Inc. (BJRI) - free report >>

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