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UMC vs. LSCC: Which Stock Should Value Investors Buy Now?

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Investors with an interest in Electronics - Semiconductors stocks have likely encountered both United Microelectronics Corporation (UMC - Free Report) and Lattice Semiconductor (LSCC - 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Both United Microelectronics Corporation and Lattice Semiconductor have a Zacks Rank of # 2 (Buy) right now. 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 factor that value investors are interested in.

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.

UMC currently has a forward P/E ratio of 13.68, while LSCC has a forward P/E of 73.55. We also note that UMC has a PEG ratio of 0.49. 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. LSCC currently has a PEG ratio of 7.35.

Another notable valuation metric for UMC is its P/B ratio of 2.98. 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, LSCC has a P/B of 26.15.

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

Both UMC and LSCC 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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