In This Article:
Investors with an interest in Beverages - Alcohol stocks have likely encountered both Kirin Holdings Co. (KNBWY) and Anheuser-Busch Inbev (BUD). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, Kirin Holdings Co. is sporting a Zacks Rank of #2 (Buy), while Anheuser-Busch Inbev 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 KNBWY 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 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.
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.
KNBWY currently has a forward P/E ratio of 12.22, while BUD has a forward P/E of 16.67. We also note that KNBWY has a PEG ratio of 0.95. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. BUD currently has a PEG ratio of 1.93.
Another notable valuation metric for KNBWY is its P/B ratio of 1.10. 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, BUD has a P/B of 1.20.
These metrics, and several others, help KNBWY earn a Value grade of A, while BUD has been given a Value grade of C.
KNBWY stands above BUD thanks to its solid earnings outlook, and based on these valuation figures, we also feel that KNBWY is 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
Kirin Holdings Co. (KNBWY) : Free Stock Analysis Report
Anheuser-Busch InBev SA/NV (BUD) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).