Is Denny's (DENN) a Great Value Stock Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One stock to keep an eye on is Denny's (DENN). DENN is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 15.25, which compares to its industry's average of 23.25. Over the past year, DENN's Forward P/E has been as high as 20.21 and as low as 12.04, with a median of 16.56.
Finally, our model also underscores that DENN has a P/CF ratio of 13.26. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. DENN's current P/CF looks attractive when compared to its industry's average P/CF of 17.54. DENN's P/CF has been as high as 13.58 and as low as 6.60, with a median of 9.90, all within the past year.
Investors could also keep in mind Carrols Restaurant Group (TAST), an Retail - Restaurants stock with a Zacks Rank of # 1 (Strong Buy) and Value grade of A.
Carrols Restaurant Group sports a P/B ratio of 2.34 as well; this compares to its industry's price-to-book ratio of -27.51. In the past 52 weeks, TAST's P/B has been as high as 2.47, as low as 0.53, with a median of 1.79.
Value investors will likely look at more than just these metrics, but the above data helps show that Denny's and Carrols Restaurant Group are likely undervalued currently. And when considering the strength of its earnings outlook, DENN and TAST sticks out as one of the market's strongest value stocks.
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Denny's Corporation (DENN) : Free Stock Analysis Report
Carrols Restaurant Group, Inc. (TAST) : Free Stock Analysis Report
