Yahoo Finance BRFS vs. LW: Which Stock Is the Better Value Option?
Investors interested in Food - Miscellaneous stocks are likely familiar with BRF (BRFS) and Lamb Weston (LW). 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.
Right now, BRF is sporting a Zacks Rank of #2 (Buy), while Lamb Weston has a Zacks Rank of #5 (Strong Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that BRFS 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.
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.
BRFS currently has a forward P/E ratio of 9.66, while LW has a forward P/E of 14.27. We also note that BRFS has a PEG ratio of 0.26. 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. LW currently has a PEG ratio of 6.18.
Another notable valuation metric for BRFS is its P/B ratio of 1.53. 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, LW has a P/B of 5.24.
Based on these metrics and many more, BRFS holds a Value grade of A, while LW has a Value grade of C.
BRFS 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 BRFS is likely the superior value option right now.
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BRF S.A. (BRFS) : Free Stock Analysis Report
Lamb Weston (LW) : Free Stock Analysis Report
