BYD vs. RRR: Which Stock Is the Better Value Option?
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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with 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 only part of the picture for value investors.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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 10.80, while RRR has a forward P/E of 23.25. We also note that BYD has a PEG ratio of 3.74. 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. RRR currently has a PEG ratio of 8.61.
Another notable valuation metric for BYD is its P/B ratio of 4.17. 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, RRR has a P/B of 139.73.
Based on these metrics and many more, BYD holds a Value grade of A, while RRR has 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
