CCEP vs. BROS: Which Stock Should Value Investors Buy Now?
Investors interested in stocks from the Beverages - Soft drinks sector have probably already heard of 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. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that CCEP has an improving earnings outlook. But this is just one factor that value investors are interested in.
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 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.
CCEP currently has a forward P/E ratio of 16.63, while BROS has a forward P/E of 181.30. We also note that CCEP has a PEG ratio of 2.36. 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. BROS currently has a PEG ratio of 3.94.
Another notable valuation metric for CCEP is its P/B ratio of 3.77. 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, BROS has a P/B of 5.23.
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
