Investors with an interest in Beverages - Soft drinks stocks have likely encountered both Coca-Cola European (CCEP) and Dutch Bros (BROS). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Coca-Cola European and Dutch Bros are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that CCEP has an improving earnings outlook. 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.
CCEP currently has a forward P/E ratio of 16.86, while BROS has a forward P/E of 187.74. We also note that CCEP has a PEG ratio of 2.39. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. BROS currently has a PEG ratio of 4.08.
Another notable valuation metric for CCEP is its P/B ratio of 3.81. 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, BROS has a P/B of 5.22.
These metrics, and several others, help CCEP earn a Value grade of B, while BROS has been given a Value grade of D.
CCEP has seen stronger estimate revision activity and sports more attractive valuation metrics than BROS, so it seems like value investors will conclude that CCEP is the superior option right now.
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See them now >>Coca-Cola Europacific Partners (CCEP) : Free Stock Analysis Report
Dutch Bros Inc. (BROS) : Free Stock Analysis Report
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