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Toyota Motor Corporation (TM) - free report >>
Porsche Automobil Holding SE Unsponsored ADR (POAHY) - free report >>
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Toyota Motor Corporation (TM) - free report >>
Porsche Automobil Holding SE Unsponsored ADR (POAHY) - free report >>
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POAHY vs. TM: Which Stock Is the Better Value Option?
Investors interested in stocks from the Automotive - Foreign sector have probably already heard of Porsche Automobil Holding SE Unsponsored ADR (POAHY - Free Report) and Toyota Motor Corporation (TM - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, Porsche Automobil Holding SE Unsponsored ADR is sporting a Zacks Rank of #2 (Buy), while Toyota Motor Corporation has a Zacks Rank of #5 (Strong Sell). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that POAHY has an improving earnings outlook. 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.
POAHY currently has a forward P/E ratio of 3.73, while TM has a forward P/E of 10.12. We also note that POAHY has a PEG ratio of 0.87. 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. TM currently has a PEG ratio of 1.96.
Another notable valuation metric for POAHY is its P/B ratio of 0.36. 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, TM has a P/B of 0.97.
These are just a few of the metrics contributing to POAHY's Value grade of A and TM's Value grade of C.
POAHY sticks out from TM in both our Zacks Rank and Style Scores models, so value investors will likely feel that POAHY is the better option right now.