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LFUS vs. OLED: Which Stock Is the Better Value Option?

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Investors looking for stocks in the Electronics - Miscellaneous Components sector might want to consider either Littelfuse (LFUS - Free Report) or Universal Display Corp. (OLED - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 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.

Currently, Littelfuse has a Zacks Rank of #2 (Buy), while Universal Display Corp. has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that LFUS 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.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

LFUS currently has a forward P/E ratio of 17.52, while OLED has a forward P/E of 32.13. We also note that LFUS has a PEG ratio of 1.46. 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. OLED currently has a PEG ratio of 1.82.

Another notable valuation metric for LFUS is its P/B ratio of 2.98. 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, OLED has a P/B of 5.18.

Based on these metrics and many more, LFUS holds a Value grade of B, while OLED has a Value grade of D.

LFUS sticks out from OLED in both our Zacks Rank and Style Scores models, so value investors will likely feel that LFUS is the better option right now.


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