CCEP vs. KO: 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 Coca-Cola (KO). 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.
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.
Both Coca-Cola European and Coca-Cola have a Zacks Rank of # 2 (Buy) right now. Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. However, value investors will care about much more than just this.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
CCEP currently has a forward P/E ratio of 16.18, while KO has a forward P/E of 21.30. We also note that CCEP has a PEG ratio of 2.47. 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. KO currently has a PEG ratio of 3.41.
Another notable valuation metric for CCEP is its P/B ratio of 3.71. 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, KO has a P/B of 9.28.
These are just a few of the metrics contributing to CCEP's Value grade of B and KO's Value grade of D.
Both CCEP and KO are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that CCEP is the superior value option right now.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Coca-Cola Europacific Partners (CCEP) : Free Stock Analysis Report
CocaCola Company (The) (KO) : Free Stock Analysis Report
