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CMCSA or CABO: Which Is the Better Value Stock Right Now?

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Investors interested in stocks from the Cable Television sector have probably already heard of Comcast (CMCSA - Free Report) and Cable One (CABO - 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.

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.

Right now, Comcast is sporting a Zacks Rank of #2 (Buy), while Cable One has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that CMCSA has an improving earnings outlook. But this is only part of the picture 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.

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.

CMCSA currently has a forward P/E ratio of 14.11, while CABO has a forward P/E of 23.43. We also note that CMCSA has a PEG ratio of 1.26. 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. CABO currently has a PEG ratio of 7.81.

Another notable valuation metric for CMCSA is its P/B ratio of 2.32. 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, CABO has a P/B of 5.93.

These metrics, and several others, help CMCSA earn a Value grade of A, while CABO has been given a Value grade of D.

CMCSA is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that CMCSA is likely the superior value option right now.


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