RICK vs. CNK: Which Stock Is the Better Value Option?
Investors interested in stocks from the Leisure and Recreation Services sector have probably already heard of RCI Hospitality (RICK) and Cinemark Holdings (CNK). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
RCI Hospitality has a Zacks Rank of #2 (Buy), while Cinemark Holdings has a Zacks Rank of #4 (Sell) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that RICK has an improving earnings outlook. 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.
RICK currently has a forward P/E ratio of 15.75, while CNK has a forward P/E of 18.55. We also note that RICK has a PEG ratio of 1.31. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. CNK currently has a PEG ratio of 1.85.
Another notable valuation metric for RICK is its P/B ratio of 3.60. 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, CNK has a P/B of 4.94.
These metrics, and several others, help RICK earn a Value grade of B, while CNK has been given a Value grade of C.
RICK has seen stronger estimate revision activity and sports more attractive valuation metrics than CNK, so it seems like value investors will conclude that RICK is the superior option right now.
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RCI Hospitality Holdings, Inc. (RICK) : Free Stock Analysis Report
Cinemark Holdings Inc (CNK) : Free Stock Analysis Report
