USFD vs. CELH: Which Stock Is the Better Value Option?

Investors looking for stocks in the Food - Miscellaneous sector might want to consider either US Foods (USFD) or Celsius Holdings Inc. (CELH). 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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

US Foods and Celsius Holdings Inc. are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that USFD'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 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.

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.

USFD currently has a forward P/E ratio of 18.51, while CELH has a forward P/E of 26.52. We also note that USFD has a PEG ratio of 1.02. 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. CELH currently has a PEG ratio of 1.36.

Another notable valuation metric for USFD is its P/B ratio of 4.6. 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, CELH has a P/B of 9.05.

These are just a few of the metrics contributing to USFD's Value grade of B and CELH's Value grade of D.

USFD sticks out from CELH in both our Zacks Rank and Style Scores models, so value investors will likely feel that USFD is the better option right now.

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US Foods Holding Corp. (USFD): Free Stock Analysis Report

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

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