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ABEV vs. NAPA: Which Stock Is the Better Value Option?

Zacks Equity Research
·2-min read

Investors looking for stocks in the Beverages - Alcohol sector might want to consider either Ambev (ABEV) or The Duckhorn Portfolio, Inc. (NAPA). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, both Ambev and The Duckhorn Portfolio, Inc. are holding a Zacks Rank of # 2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. 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.

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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.

ABEV currently has a forward P/E ratio of 18.83, while NAPA has a forward P/E of 38.90. We also note that ABEV has a PEG ratio of 2.40. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. NAPA currently has a PEG ratio of 3.58.

Another notable valuation metric for ABEV is its P/B ratio of 2.55. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, NAPA has a P/B of 3.15.

Based on these metrics and many more, ABEV holds a Value grade of B, while NAPA has a Value grade of D.

Both ABEV and NAPA are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that ABEV is the superior value option right now.


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Ambev S.A. (ABEV) : Free Stock Analysis Report
 
The Duckhorn Portfolio, Inc. (NAPA) : Free Stock Analysis Report
 
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