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UMC or SYNA: Which Is the Better Value Stock Right Now?

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Investors with an interest in Electronics - Semiconductors stocks have likely encountered both United Microelectronics Corporation (UMC - Free Report) and Synaptics (SYNA - 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, both United Microelectronics Corporation and Synaptics are sporting a Zacks Rank of # 2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is just one factor that value investors are interested in.

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.

UMC currently has a forward P/E ratio of 15.15, while SYNA has a forward P/E of 17.62. We also note that UMC has a PEG ratio of 0.78. 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. SYNA currently has a PEG ratio of 1.76.

Another notable valuation metric for UMC is its P/B ratio of 3.08. 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, SYNA has a P/B of 6.37.

Based on these metrics and many more, UMC holds a Value grade of B, while SYNA has a Value grade of C.

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


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