We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
STM or TXN: Which Is the Better Value Stock Right Now?
Read MoreHide Full Article
Investors interested in stocks from the Semiconductor - General sector have probably already heard of STMicroelectronics (STM - Free Report) and Texas Instruments (TXN - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
STMicroelectronics has a Zacks Rank of #1 (Strong Buy), while Texas Instruments has a Zacks Rank of #2 (Buy) right now. This means that STM's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors.
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.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
STM currently has a forward P/E ratio of 9.53, while TXN has a forward P/E of 18.90. We also note that STM has a PEG ratio of 1.91. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. TXN currently has a PEG ratio of 2.02.
Another notable valuation metric for STM is its P/B ratio of 3.29. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, TXN has a P/B of 11.46.
These metrics, and several others, help STM earn a Value grade of B, while TXN has been given a Value grade of C.
STM 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 STM 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:
Image: Bigstock
STM or TXN: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Semiconductor - General sector have probably already heard of STMicroelectronics (STM - Free Report) and Texas Instruments (TXN - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
STMicroelectronics has a Zacks Rank of #1 (Strong Buy), while Texas Instruments has a Zacks Rank of #2 (Buy) right now. This means that STM's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors.
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.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
STM currently has a forward P/E ratio of 9.53, while TXN has a forward P/E of 18.90. We also note that STM has a PEG ratio of 1.91. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. TXN currently has a PEG ratio of 2.02.
Another notable valuation metric for STM is its P/B ratio of 3.29. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, TXN has a P/B of 11.46.
These metrics, and several others, help STM earn a Value grade of B, while TXN has been given a Value grade of C.
STM 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 STM is likely the superior value option right now.