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UMC vs. NVMI: Which Stock Is the Better Value Option?
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Investors with an interest in Electronics - Semiconductors stocks have likely encountered both United Microelectronics Corporation (UMC - Free Report) and Nova Ltd. (NVMI - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, United Microelectronics Corporation has a Zacks Rank of #2 (Buy), while Nova Ltd. has a Zacks Rank of #4 (Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that UMC is likely seeing its earnings outlook improve to a greater extent. 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.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
UMC currently has a forward P/E ratio of 8.30, while NVMI has a forward P/E of 25.06. We also note that UMC has a PEG ratio of 0.29. 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. NVMI currently has a PEG ratio of 0.78.
Another notable valuation metric for UMC is its P/B ratio of 2.41. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, NVMI has a P/B of 6.33.
Based on these metrics and many more, UMC holds a Value grade of A, while NVMI has a Value grade of C.
UMC has seen stronger estimate revision activity and sports more attractive valuation metrics than NVMI, so it seems like value investors will conclude that UMC is the superior option right now.
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UMC vs. NVMI: Which Stock Is the Better Value Option?
Investors with an interest in Electronics - Semiconductors stocks have likely encountered both United Microelectronics Corporation (UMC - Free Report) and Nova Ltd. (NVMI - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, United Microelectronics Corporation has a Zacks Rank of #2 (Buy), while Nova Ltd. has a Zacks Rank of #4 (Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that UMC is likely seeing its earnings outlook improve to a greater extent. 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.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
UMC currently has a forward P/E ratio of 8.30, while NVMI has a forward P/E of 25.06. We also note that UMC has a PEG ratio of 0.29. 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. NVMI currently has a PEG ratio of 0.78.
Another notable valuation metric for UMC is its P/B ratio of 2.41. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, NVMI has a P/B of 6.33.
Based on these metrics and many more, UMC holds a Value grade of A, while NVMI has a Value grade of C.
UMC has seen stronger estimate revision activity and sports more attractive valuation metrics than NVMI, so it seems like value investors will conclude that UMC is the superior option right now.