CCL or ATAT: Which Is the Better Value Stock Right Now?

Investors looking for stocks in the Leisure and Recreation Services sector might want to consider either Carnival (CCL) or Atour Lifestyle Holdings Limited Sponsored ADR (ATAT). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.

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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Carnival and Atour Lifestyle Holdings Limited Sponsored ADR are sporting Zacks Ranks of #1 (Strong Buy) and #4 (Sell), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that CCL is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.

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.

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.

CCL currently has a forward P/E ratio of 14.87, while ATAT has a forward P/E of 22.01. We also note that CCL has a PEG ratio of 0.67. 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. ATAT currently has a PEG ratio of 1.02.

Another notable valuation metric for CCL is its P/B ratio of 3.47. 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, ATAT has a P/B of 10.65.

These metrics, and several others, help CCL earn a Value grade of A, while ATAT has been given a Value grade of C.

CCL stands above ATAT thanks to its solid earnings outlook, and based on these valuation figures, we also feel that CCL is the superior value option right now.

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This article originally published on Zacks Investment Research (zacks.com).

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