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TTDKY or TEL: Which Is the Better Value Stock Right Now?
Investors with an interest in Electronics - Miscellaneous Components stocks have likely encountered both TDK Corp. (TTDKY - Free Report) and TE Connectivity (TEL - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
TDK Corp. and TE Connectivity are sporting Zacks Ranks of #1 (Strong Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that TTDKY is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.
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.
TTDKY currently has a forward P/E ratio of 11.10, while TEL has a forward P/E of 16.79. We also note that TTDKY has a PEG ratio of 0.91. 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. TEL currently has a PEG ratio of 2.34.
Another notable valuation metric for TTDKY is its P/B ratio of 1.14. 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, TEL has a P/B of 3.39.
Based on these metrics and many more, TTDKY holds a Value grade of B, while TEL has a Value grade of C.
TTDKY stands above TEL thanks to its solid earnings outlook, and based on these valuation figures, we also feel that TTDKY is the superior value option right now.