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STM or TXN: Which Is the Better Value Stock Right Now?
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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 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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
STMicroelectronics and Texas Instruments are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that STM likely has seen a stronger improvement to its earnings outlook than TXN has recently. 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 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.
STM currently has a forward P/E ratio of 8.18, while TXN has a forward P/E of 16.15. We also note that STM has a PEG ratio of 1.64. 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. TXN currently has a PEG ratio of 1.73.
Another notable valuation metric for STM is its P/B ratio of 2.82. 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, TXN has a P/B of 9.79.
These metrics, and several others, help STM earn a Value grade of A, while TXN has been given a Value grade of C.
STM stands above TXN thanks to its solid earnings outlook, and based on these valuation figures, we also feel that STM is the superior value option right now.
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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 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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
STMicroelectronics and Texas Instruments are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that STM likely has seen a stronger improvement to its earnings outlook than TXN has recently. 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 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.
STM currently has a forward P/E ratio of 8.18, while TXN has a forward P/E of 16.15. We also note that STM has a PEG ratio of 1.64. 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. TXN currently has a PEG ratio of 1.73.
Another notable valuation metric for STM is its P/B ratio of 2.82. 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, TXN has a P/B of 9.79.
These metrics, and several others, help STM earn a Value grade of A, while TXN has been given a Value grade of C.
STM stands above TXN thanks to its solid earnings outlook, and based on these valuation figures, we also feel that STM is the superior value option right now.