CABGY vs. DEO: Which Stock Is the Better Value Option?
Investors looking for stocks in the Beverages - Alcohol sector might want to consider either Carlsberg AS (CABGY) or Diageo (DEO). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Carlsberg AS has a Zacks Rank of #2 (Buy), while Diageo has a Zacks Rank of #4 (Sell) right now. Investors should feel comfortable knowing that CABGY likely has seen a stronger improvement to its earnings outlook than DEO has recently. 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.
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 16.54, while DEO has a forward P/E of 20.01. We also note that CABGY has a PEG ratio of 2.56. 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. DEO currently has a PEG ratio of 3.52.
Another notable valuation metric for CABGY 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, DEO has a P/B of 7.09.
These metrics, and several others, help CABGY earn a Value grade of B, while DEO has been given a Value grade of D.
CABGY is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that CABGY is likely the superior value option right now.
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Carlsberg AS (CABGY) : Free Stock Analysis Report
Diageo plc (DEO) : Free Stock Analysis Report
