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

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Investors interested in Electronics - Miscellaneous Components stocks are likely familiar with OSI Systems (OSIS - Free Report) and 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.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. 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, OSI Systems has a Zacks Rank of #2 (Buy), while Universal Display Corp. has a Zacks Rank of #4 (Sell). Investors should feel comfortable knowing that OSIS likely has seen a stronger improvement to its earnings outlook than OLED has recently. But this is only part of the picture for value investors.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

OSIS currently has a forward P/E ratio of 16.36, while OLED has a forward P/E of 39.08. We also note that OSIS has a PEG ratio of 1.49. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. OLED currently has a PEG ratio of 2.51.

Another notable valuation metric for OSIS is its P/B ratio of 2.59. 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 5.43.

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

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


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