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KHC or NSRGY: Which Is the Better Value Stock Right Now?

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Investors looking for stocks in the Food - Miscellaneous sector might want to consider either Kraft Heinz (KHC) or Nestle SA (NSRGY). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive 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.

Kraft Heinz has a Zacks Rank of #2 (Buy), while Nestle SA has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that KHC is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture for value investors.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.

KHC currently has a forward P/E ratio of 13.71, while NSRGY has a forward P/E of 26.26. We also note that KHC has a PEG ratio of 2.74. 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. NSRGY currently has a PEG ratio of 3.50.

Another notable valuation metric for KHC is its P/B ratio of 0.90. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, NSRGY has a P/B of 6.90.

These are just a few of the metrics contributing to KHC's Value grade of B and NSRGY's Value grade of C.

KHC has seen stronger estimate revision activity and sports more attractive valuation metrics than NSRGY, so it seems like value investors will conclude that KHC is the superior option right now.


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The Kraft Heinz Company (KHC) : Free Stock Analysis Report
 
Nestle SA (NSRGY) : Free Stock Analysis Report
 
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