Investors with an interest in Food - Miscellaneous stocks have likely encountered both US Foods (USFD) and Celsius Holdings Inc. (CELH). 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.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
US Foods has a Zacks Rank of #2 (Buy), while Celsius Holdings Inc. has a Zacks Rank of #4 (Sell) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that USFD has an improving earnings outlook. But this is only part of the picture for value investors.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
USFD currently has a forward P/E ratio of 17.67, while CELH has a forward P/E of 31.82. We also note that USFD has a PEG ratio of 0.86. 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. CELH currently has a PEG ratio of 3.05.
Another notable valuation metric for USFD is its P/B ratio of 3.57. 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 16.20.
These are just a few of the metrics contributing to USFD's Value grade of A and CELH's Value grade of D.
USFD has seen stronger estimate revision activity and sports more attractive valuation metrics than CELH, so it seems like value investors will conclude that USFD is the superior option right now.
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US Foods Holding Corp. (USFD) : Free Stock Analysis Report
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