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CCEP vs. BROS: Which Stock Is the Better Value Option?

Investors with an interest in Beverages - Soft drinks stocks have likely encountered both Coca-Cola European (CCEP) and Dutch Bros (BROS). 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Coca-Cola European has a Zacks Rank of #2 (Buy), while Dutch Bros has a Zacks Rank of #4 (Sell) right now. Investors should feel comfortable knowing that CCEP likely has seen a stronger improvement to its earnings outlook than BROS has recently. However, value investors will care about much more than just this.

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.

CCEP currently has a forward P/E ratio of 17.24, while BROS has a forward P/E of 142.77. We also note that CCEP has a PEG ratio of 2.44. 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. BROS currently has a PEG ratio of 3.10.

Another notable valuation metric for CCEP is its P/B ratio of 3.88. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, BROS has a P/B of 4.89.

These metrics, and several others, help CCEP earn a Value grade of B, while BROS has been given a Value grade of D.

CCEP has seen stronger estimate revision activity and sports more attractive valuation metrics than BROS, so it seems like value investors will conclude that CCEP is the superior option right now.

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Coca-Cola Europacific Partners (CCEP) : Free Stock Analysis Report

Dutch Bros Inc. (BROS) : Free Stock Analysis Report

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Zacks Investment Research