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Investors looking for stocks in the Food - Miscellaneous sector might want to consider either Utz Brands (UTZ) or Kerry Group PLC (KRYAY). 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Utz Brands and Kerry Group PLC are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that UTZ's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. 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.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
UTZ currently has a forward P/E ratio of 15.97, while KRYAY has a forward P/E of 19.48. We also note that UTZ has a PEG ratio of 1.69. 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. KRYAY currently has a PEG ratio of 1.71.
Another notable valuation metric for UTZ is its P/B ratio of 1.38. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, KRYAY has a P/B of 2.46.
These are just a few of the metrics contributing to UTZ's Value grade of B and KRYAY's Value grade of C.
UTZ stands above KRYAY thanks to its solid earnings outlook, and based on these valuation figures, we also feel that UTZ is the superior value option right now.
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Utz Brands, Inc. (UTZ) : Free Stock Analysis Report
Kerry Group PLC (KRYAY) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).