Back to top

Image: Bigstock

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

Read MoreHide Full Article

Investors interested in Audio Video Production stocks are likely familiar with Panasonic Corp. and Dolby Laboratories (DLB - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's 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.

Panasonic Corp. and Dolby Laboratories are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that PCRFY's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.

PCRFY currently has a forward P/E ratio of 9.88, while DLB has a forward P/E of 18.72. We also note that PCRFY has a PEG ratio of 0.38. 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. DLB currently has a PEG ratio of 1.44.

Another notable valuation metric for PCRFY is its P/B ratio of 0.84. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, DLB has a P/B of 2.74.

Based on these metrics and many more, PCRFY holds a Value grade of A, while DLB has a Value grade of D.

PCRFY 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 PCRFY is likely the superior value option right now.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Dolby Laboratories (DLB) - free report >>

Published in