Investors interested in Leisure and Recreation Services stocks are likely familiar with Carnival (CCL – Free Report) and Viad (PRSU – Free Report) . But which of these two stocks is more attractive to value investors? We’ll need to take a closer look to find out.
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 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, Carnival has a Zacks Rank of #2 (Buy), while Viad has a Zacks Rank of #5 (Strong Sell). This means that CCL’s earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
CCL currently has a forward P/E ratio of 13.63, while PRSU has a forward P/E of 48.50. We also note that CCL has a PEG ratio of 0.75. 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. PRSU currently has a PEG ratio of 3.23.
Another notable valuation metric for CCL is its P/B ratio of 2.97. 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, PRSU has a P/B of 4.55.
Based on these metrics and many more, CCL holds a Value grade of A, while PRSU has a Value grade of C.
CCL sticks out from PRSU in both our Zacks Rank and Style Scores models, so value investors will likely feel that CCL is the better option right now.
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