U.S. markets closed
  • S&P 500

    3,941.26
    -57.58 (-1.44%)
     
  • Dow 30

    33,596.34
    -350.76 (-1.03%)
     
  • Nasdaq

    11,014.89
    -225.05 (-2.00%)
     
  • Russell 2000

    1,812.58
    -27.65 (-1.50%)
     
  • Crude Oil

    74.47
    +0.22 (+0.30%)
     
  • Gold

    1,782.90
    +0.50 (+0.03%)
     
  • Silver

    22.35
    +0.02 (+0.07%)
     
  • EUR/USD

    1.0466
    -0.0003 (-0.03%)
     
  • 10-Yr Bond

    3.5130
    -0.0860 (-2.39%)
     
  • GBP/USD

    1.2130
    -0.0004 (-0.03%)
     
  • USD/JPY

    136.8600
    -0.1000 (-0.07%)
     
  • BTC-USD

    17,086.69
    +99.99 (+0.59%)
     
  • CMC Crypto 200

    400.49
    -1.32 (-0.33%)
     
  • FTSE 100

    7,521.39
    -46.15 (-0.61%)
     
  • Nikkei 225

    27,885.87
    +65.47 (+0.24%)
     

CCU vs. STZ: Which Stock Is the Better Value Option?

Investors interested in stocks from the Beverages - Alcohol sector have probably already heard of Cervecerias Unidas (CCU) and Constellation Brands (STZ). 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Right now, Cervecerias Unidas is sporting a Zacks Rank of #2 (Buy), while Constellation Brands has a Zacks Rank of #4 (Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that CCU is likely seeing its earnings outlook improve to a greater extent. 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.

CCU currently has a forward P/E ratio of 12.13, while STZ has a forward P/E of 22.26. We also note that CCU has a PEG ratio of 0.78. 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. STZ currently has a PEG ratio of 2.06.

Another notable valuation metric for CCU is its P/B ratio of 1.34. 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, STZ has a P/B of 3.92.

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

CCU sticks out from STZ in both our Zacks Rank and Style Scores models, so value investors will likely feel that CCU is the better 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
 
Compania Cervecerias Unidas, S.A. (CCU) : Free Stock Analysis Report
 
Constellation Brands Inc (STZ) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research