Yahoo Finance CMPGY or CMG: Which Is the Better Value Stock Right Now?
Investors interested in Retail - Restaurants stocks are likely familiar with Compass Group PLC (CMPGY) and Chipotle Mexican Grill (CMG). But which of these two stocks presents investors with the better value opportunity right now? Let's 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Compass Group PLC has a Zacks Rank of #2 (Buy), while Chipotle Mexican Grill has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that CMPGY likely has seen a stronger improvement to its earnings outlook than CMG has recently. 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.
CMPGY currently has a forward P/E ratio of 23.89, while CMG has a forward P/E of 56.61. We also note that CMPGY has a PEG ratio of 1.94. 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. CMG currently has a PEG ratio of 2.49.
Another notable valuation metric for CMPGY is its P/B ratio of 7.71. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, CMG has a P/B of 25.58.
These metrics, and several others, help CMPGY earn a Value grade of B, while CMG has been given a Value grade of F.
CMPGY 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 CMPGY is likely the superior value option right now.
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Compass Group PLC (CMPGY) : Free Stock Analysis Report
Chipotle Mexican Grill, Inc. (CMG) : Free Stock Analysis Report
