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STM vs. TXN: Which Stock Is the Better Value Option?
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Investors with an interest in Semiconductor - General stocks have likely encountered both STMicroelectronics (STM - Free Report) and Texas Instruments (TXN - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
STMicroelectronics has a Zacks Rank of #2 (Buy), while Texas Instruments has a Zacks Rank of #3 (Hold) right now. This means that STM's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.
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.
STM currently has a forward P/E ratio of 11.68, while TXN has a forward P/E of 23.38. We also note that STM has a PEG ratio of 2.34. 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. TXN currently has a PEG ratio of 2.51.
Another notable valuation metric for STM is its P/B ratio of 3.36. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, TXN has a P/B of 11.03.
These metrics, and several others, help STM earn a Value grade of A, while TXN has been given a Value grade of C.
STM stands above TXN thanks to its solid earnings outlook, and based on these valuation figures, we also feel that STM is the superior value option right now.
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STM vs. TXN: Which Stock Is the Better Value Option?
Investors with an interest in Semiconductor - General stocks have likely encountered both STMicroelectronics (STM - Free Report) and Texas Instruments (TXN - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
STMicroelectronics has a Zacks Rank of #2 (Buy), while Texas Instruments has a Zacks Rank of #3 (Hold) right now. This means that STM's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.
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.
STM currently has a forward P/E ratio of 11.68, while TXN has a forward P/E of 23.38. We also note that STM has a PEG ratio of 2.34. 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. TXN currently has a PEG ratio of 2.51.
Another notable valuation metric for STM is its P/B ratio of 3.36. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, TXN has a P/B of 11.03.
These metrics, and several others, help STM earn a Value grade of A, while TXN has been given a Value grade of C.
STM stands above TXN thanks to its solid earnings outlook, and based on these valuation figures, we also feel that STM is the superior value option right now.