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NXST vs. GAIA: Which Stock Should Value Investors Buy Now?

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Investors interested in stocks from the Broadcast Radio and Television sector have probably already heard of Nexstar Broadcasting Group (NXST - Free Report) and Gaiam (GAIA - 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 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.

Nexstar Broadcasting Group and Gaiam are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that NXST likely has seen a stronger improvement to its earnings outlook than GAIA has recently. But this is only part of the picture for value investors.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks 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.

NXST currently has a forward P/E ratio of 8.76, while GAIA has a forward P/E of 109.73. We also note that NXST has a PEG ratio of 0.88. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. GAIA currently has a PEG ratio of 7.32.

Another notable valuation metric for NXST is its P/B ratio of 2.44. 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, GAIA has a P/B of 3.08.

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

NXST has seen stronger estimate revision activity and sports more attractive valuation metrics than GAIA, so it seems like value investors will conclude that NXST is the superior option right now.


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Nexstar Media Group, Inc (NXST) - free report >>

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