In This Article:
Investors interested in stocks from the Food - Miscellaneous sector have probably already heard of BRF (BRFS) and Kerry Group PLC (KRYAY). But which of these two companies is the best option for those looking for undervalued stocks? 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.
BRF has a Zacks Rank of #2 (Buy), while Kerry Group PLC has a Zacks Rank of #4 (Sell) right now. This means that BRFS's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle 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 highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
BRFS currently has a forward P/E ratio of 9.16, while KRYAY has a forward P/E of 19.93. We also note that BRFS has a PEG ratio of 0.23. 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. KRYAY currently has a PEG ratio of 2.02.
Another notable valuation metric for BRFS is its P/B ratio of 1.48. 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, KRYAY has a P/B of 2.40.
These are just a few of the metrics contributing to BRFS's Value grade of A and KRYAY's Value grade of C.
BRFS is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that BRFS is likely the superior value option right now.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
BRF S.A. (BRFS) : Free Stock Analysis Report
Kerry Group PLC (KRYAY) : Free Stock Analysis Report