CCEP vs. MNST: Which stock offers the better value option?

Investors interested in beverage and soft drink stocks have probably come across Coca-Cola European (CCEP) and Monster Beverage (MNST). But which of these two stocks is more attractive to value investors? To find out, we need to take a closer look at the stock.

We have found that the best way to discover great value opportunities is to combine a strong Zacks Rank with an outstanding grade in the Value category of our Style Scores system. The proven Zacks Rank highlights companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Coca-Cola European currently has a Zacks Rank of #2 (Buy), while Monster Beverage currently has a Zacks Rank of #3 (Hold). Investors should take comfort in the fact that CCEP’s earnings outlook has likely improved more than MNST’s recently. But that’s just one factor of interest to value investors.

Value investors also tend to use a set of traditional, tried-and-tested numbers to find stocks that they believe are undervalued at their current price levels.

The Value category of the Style Scores system identifies undervalued companies using a number of key metrics, including the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other fundamentals that help us determine a company’s fair value.

CCEP currently has a forward P/E ratio of 15.66, while MNST has a forward P/E ratio of 44.91. We also note that CCEP has a PEG ratio of 1.32. This popular metric is similar to the widely known P/E ratio, with the difference being that the PEG ratio also takes into account the company’s expected earnings growth rate. MNST currently has a PEG ratio of 3.95.

Another important valuation metric for CCEP is its P/B ratio of 2.94. The P/B ratio is used to compare the market value of a stock to its book value, which is defined as total assets minus total liabilities. For comparison, MNST has a P/B ratio of 7.90.

These and several other metrics help CCEP earn a grade of A, while MNST receives a grade of D.

CCEP is priced above MNST thanks to its solid earnings outlook, and based on these valuation numbers, we also believe CCEP is the better value option currently.

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CocaCola Europacific Partners (CCEP): Free Stock Analysis Report

Monster Beverage Corporation (MNST): Free Stock Analysis Report

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