FMX or BROS: Which Is the Better Value Stock Right Now?
Investors interested in Beverages - Soft drinks stocks are likely familiar with Fomento Economico (FMX) and Dutch Bros (BROS). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Fomento Economico and Dutch Bros are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that FMX is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.
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.
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.
FMX currently has a forward P/E ratio of 20.07, while BROS has a forward P/E of 115.72. We also note that FMX has a PEG ratio of 1.76. 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 3.08.
Another notable valuation metric for FMX is its P/B ratio of 1.92. 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 6.25.
These metrics, and several others, help FMX earn a Value grade of B, while BROS has been given a Value grade of D.
FMX stands above BROS thanks to its solid earnings outlook, and based on these valuation figures, we also feel that FMX is the superior value option right now.
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Fomento Economico Mexicano S.A.B. de C.V. (FMX) : Free Stock Analysis Report
Dutch Bros Inc. (BROS) : Free Stock Analysis Report
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