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PARA vs. DIS: Which Stock Is the Better Value Option?

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Investors interested in stocks from the Media Conglomerates sector have probably already heard of Paramount Global-B (PARA - Free Report) and Walt Disney (DIS - Free Report) . 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.

Right now, both Paramount Global-B and Walt Disney are sporting 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. But this is just one piece of the puzzle for value investors.

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.

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.

PARA currently has a forward P/E ratio of 10.53, while DIS has a forward P/E of 24.11. We also note that PARA has a PEG ratio of 0.42. 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. DIS currently has a PEG ratio of 1.38.

Another notable valuation metric for PARA is its P/B ratio of 0.40. 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, DIS has a P/B of 1.96.

These are just a few of the metrics contributing to PARA's Value grade of A and DIS's Value grade of C.

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


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