DAR vs. MDLZ: Which Stock Is the Better Value Option?

Investors interested in stocks from the Food - Miscellaneous sector have probably already heard of Darling Ingredients (DAR) and Mondelez (MDLZ). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, Darling Ingredients has a Zacks Rank of #2 (Buy), while Mondelez has a Zacks Rank of #3 (Hold). This means that DAR's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.

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 Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

DAR currently has a forward P/E ratio of 17.68, while MDLZ has a forward P/E of 18.97. We also note that DAR has a PEG ratio of 0.43. 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. MDLZ currently has a PEG ratio of 2.40.

Another notable valuation metric for DAR is its P/B ratio of 1.94. 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, MDLZ has a P/B of 2.85.

These are just a few of the metrics contributing to DAR's Value grade of B and MDLZ's Value grade of C.

DAR has seen stronger estimate revision activity and sports more attractive valuation metrics than MDLZ, so it seems like value investors will conclude that DAR is the superior option right now.

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Darling Ingredients Inc. (DAR): Free Stock Analysis Report

Mondelez International, Inc. (MDLZ): Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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