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Investors interested in Beverages - Alcohol stocks are likely familiar with Carlsberg AS (CABGY) and Brown-Forman B (BF.B). But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, Carlsberg AS is sporting a Zacks Rank of #2 (Buy), while Brown-Forman B 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 CABGY 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 try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.
CABGY currently has a forward P/E ratio of 14.63, while BF.B has a forward P/E of 17.35. We also note that CABGY has a PEG ratio of 1.43. 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. BF.B currently has a PEG ratio of 5.42.
Another notable valuation metric for CABGY is its P/B ratio of 3.66. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, BF.B has a P/B of 3.89.
These are just a few of the metrics contributing to CABGY's Value grade of B and BF.B's Value grade of D.
CABGY has seen stronger estimate revision activity and sports more attractive valuation metrics than BF.B, so it seems like value investors will conclude that CABGY is the superior option right now.
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Carlsberg AS (CABGY) : Free Stock Analysis Report
Brown-Forman Corporation (BF.B) : Free Stock Analysis Report