HEINY or SAM: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Beverages - Alcohol sector might want to consider either Heineken NV (HEINY) or Boston BeerSAM-- (SAM). 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.
Right now, Heineken NV is sporting a Zacks Rank of #2 (Buy), while Boston Beer has a Zacks Rank of #4 (Sell). This means that HEINY'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 analyze a variety of traditional, tried-and-true metrics to help find companies 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.
HEINY currently has a forward P/E ratio of 12.22, while SAMSAM-- has a forward P/E of 22.85. We also note that HEINY has a PEG ratio of 1.34. 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. SAM currently has a PEG ratio of 2.52.
Another notable valuation metric for HEINY is its P/B ratio of 1.87. 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, SAM has a P/B of 2.85.
Based on these metrics and many more, HEINY holds a Value grade of B, while SAM has a Value grade of C.
HEINY sticks out from SAM in both our Zacks Rank and Style Scores models, so value investors will likely feel that HEINY is the better option right now.
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Heineken NV (HEINY): Free Stock Analysis Report
The Boston Beer Company, Inc. (SAM): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
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