Yahoo Finance KHC or DANOY: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Food - Miscellaneous sector might want to consider either Kraft Heinz (KHC) or Danone (DANOY). 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.
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.
Right now, Kraft Heinz is sporting a Zacks Rank of #2 (Buy), while Danone has a Zacks Rank of #4 (Sell). This means that KHC'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 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.
KHC currently has a forward P/E ratio of 12.61, while DANOY has a forward P/E of 17.03. We also note that KHC has a PEG ratio of 3.01. 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. DANOY currently has a PEG ratio of 5.46.
Another notable valuation metric for KHC is its P/B ratio of 0.94. 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, DANOY has a P/B of 2.40.
These are just a few of the metrics contributing to KHC's Value grade of B and DANOY's Value grade of C.
KHC has seen stronger estimate revision activity and sports more attractive valuation metrics than DANOY, so it seems like value investors will conclude that KHC is the superior option right now.
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Kraft Heinz Company (KHC) : Free Stock Analysis Report
Danone (DANOY) : Free Stock Analysis Report
