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

Zacks Equity Research
·2 min read

Investors interested in Beverages - Alcohol stocks are likely familiar with Cervecerias Unidas (CCU) and The Duckhorn Portfolio, Inc. (NAPA). 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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Currently, both Cervecerias Unidas and The Duckhorn Portfolio, Inc. are holding a Zacks Rank of # 2 (Buy). This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. However, value investors will care about much more than just this.

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.

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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.

CCU currently has a forward P/E ratio of 14.39, while NAPA has a forward P/E of 40.04. We also note that CCU has a PEG ratio of 0.97. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. NAPA currently has a PEG ratio of 4.25.

Another notable valuation metric for CCU is its P/B ratio of 1.54. 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, NAPA has a P/B of 3.20.

These are just a few of the metrics contributing to CCU's Value grade of A and NAPA's Value grade of D.

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


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Compania Cervecerias Unidas, S.A. (CCU) : Free Stock Analysis Report
 
The Duckhorn Portfolio, Inc. (NAPA) : Free Stock Analysis Report
 
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Zacks Investment Research