BYD or RRR: Which Is the Better Value Stock Right Now?
Investors with an interest in Gaming stocks have likely encountered both Boyd Gaming (BYD) and Red Rock Resorts (RRR). 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 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.
Boyd Gaming has a Zacks Rank of #2 (Buy), while Red Rock Resorts has a Zacks Rank of #3 (Hold) right now. This means that BYD's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors.
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.
BYD currently has a forward P/E ratio of 11.12, while RRR has a forward P/E of 24.31. We also note that BYD has a PEG ratio of 1.17. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. RRR currently has a PEG ratio of 21.32.
Another notable valuation metric for BYD is its P/B ratio of 4.64. 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, RRR has a P/B of 581.67.
These metrics, and several others, help BYD earn a Value grade of A, while RRR has been given a Value grade of C.
BYD sticks out from RRR in both our Zacks Rank and Style Scores models, so value investors will likely feel that BYD is the better option right now.
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Boyd Gaming Corporation (BYD) : Free Stock Analysis Report
Red Rock Resorts, Inc. (RRR) : Free Stock Analysis Report
