HEINY vs. PRNDY: Which Stock Is the Better Value Option?
Investors interested in stocks from the Beverages - Alcohol sector have probably already heard of Heineken NV (HEINY) and Pernod Ricard SA (PRNDY). 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.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Currently, Heineken NV has a Zacks Rank of #1 (Strong Buy), while Pernod Ricard SA has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that HEINY is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.
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.
HEINY currently has a forward P/E ratio of 17, while PRNDY has a forward P/E of 20.52. We also note that HEINY has a PEG ratio of 1.11. 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. PRNDY currently has a PEG ratio of 1.69.
Another notable valuation metric for HEINY is its P/B ratio of 2.42. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, PRNDY has a P/B of 2.89.
Based on these metrics and many more, HEINY holds a Value grade of B, while PRNDY has a Value grade of C.
HEINY stands above PRNDY thanks to its solid earnings outlook, and based on these valuation figures, we also feel that HEINY is the superior value option right now.
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Heineken NV (HEINY) : Free Stock Analysis Report
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