HEINY vs. STZ: Which Stock Is the Better Value Option?
Investors with an interest in Beverages - Alcohol stocks have likely encountered both Heineken NV (HEINY) and Constellation Brands (STZ). 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Heineken NV and Constellation Brands are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. This means that HEINY's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. 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 17.15, while STZ has a forward P/E of 21.35. We also note that HEINY has a PEG ratio of 1.12. 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. STZ currently has a PEG ratio of 2.32.
Another notable valuation metric for HEINY is its P/B ratio of 2.45. 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, STZ has a P/B of 4.81.
Based on these metrics and many more, HEINY holds a Value grade of A, while STZ has a Value grade of D.
HEINY sticks out from STZ in both our Zacks Rank and Style Scores models, so value investors will likely feel that HEINY is the better option right now.
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Heineken NV (HEINY) : Free Stock Analysis Report
Constellation Brands Inc (STZ) : Free Stock Analysis Report
