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SNE vs. DLB: Which Stock Should Value Investors Buy Now?

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Investors interested in Audio Video Production stocks are likely familiar with Sony and Dolby Laboratories (DLB - Free Report) . 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.

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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Sony has a Zacks Rank of #1 (Strong Buy), while Dolby Laboratories has a Zacks Rank of #5 (Strong Sell) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that SNE has 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.

SNE currently has a forward P/E ratio of 15.43, while DLB has a forward P/E of 32.10. We also note that SNE has a PEG ratio of 1.95. 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. DLB currently has a PEG ratio of 2.47.

Another notable valuation metric for SNE is its P/B ratio of 2.51. 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, DLB has a P/B of 3.96.

These are just a few of the metrics contributing to SNE's Value grade of B and DLB's Value grade of D.

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


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