Yahoo Finance KNBWY vs. DEO: Which Stock Is the Better Value Option?
Investors interested in stocks from the Beverages - Alcohol sector have probably already heard of Kirin Holdings Co. (KNBWY) and Diageo (DEO). But which of these two stocks presents investors with the better value opportunity right now? 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Kirin Holdings Co. has a Zacks Rank of #1 (Strong Buy), while Diageo has a Zacks Rank of #4 (Sell) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that KNBWY is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.
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.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
KNBWY currently has a forward P/E ratio of 11.92, while DEO has a forward P/E of 17.30. We also note that KNBWY has a PEG ratio of 0.68. 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. DEO currently has a PEG ratio of 4.18.
Another notable valuation metric for KNBWY is its P/B ratio of 1.15. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, DEO has a P/B of 6.18.
These are just a few of the metrics contributing to KNBWY's Value grade of B and DEO's Value grade of D.
KNBWY is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that KNBWY is likely the superior value option right now.
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Kirin Holdings Co. (KNBWY) : Free Stock Analysis Report
Diageo plc (DEO) : Free Stock Analysis Report
