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ASBFY vs. NSRGY: Which Stock Is the Better Value Option?

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Investors with an interest in Food - Miscellaneous stocks have likely encountered both Associated British Foods PLC (ASBFY) and Nestle SA (NSRGY). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Associated British Foods PLC and Nestle SA are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that ASBFY likely has seen a stronger improvement to its earnings outlook than NSRGY has recently. But this is just one piece of the puzzle for value investors.

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.

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.

ASBFY currently has a forward P/E ratio of 25.44, while NSRGY has a forward P/E of 26.57. We also note that ASBFY has a PEG ratio of 1.78. 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. NSRGY currently has a PEG ratio of 3.36.

Another notable valuation metric for ASBFY is its P/B ratio of 1.71. 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, NSRGY has a P/B of 7.29.

These are just a few of the metrics contributing to ASBFY's Value grade of B and NSRGY's Value grade of C.

ASBFY sticks out from NSRGY in both our Zacks Rank and Style Scores models, so value investors will likely feel that ASBFY is the better option right now.


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Associated British Foods PLC (ASBFY) : Free Stock Analysis Report
 
Nestle SA (NSRGY) : Free Stock Analysis Report
 
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