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OSIS or OLED: Which Is the Better Value Stock Right Now?

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Investors looking for stocks in the Electronics - Miscellaneous Components sector might want to consider either OSI Systems (OSIS - Free Report) or Universal Display Corp. (OLED - 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.

OSI Systems and Universal Display Corp. are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. 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 analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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 15.39, while OLED has a forward P/E of 40.97. We also note that OSIS has a PEG ratio of 1.40. 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 2.73.

Another notable valuation metric for OSIS is its P/B ratio of 2.76. 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, OLED has a P/B of 5.73.

These metrics, and several others, help OSIS earn a Value grade of B, while OLED has been given a Value grade of D.

OSIS has seen stronger estimate revision activity and sports more attractive valuation metrics than OLED, so it seems like value investors will conclude that OSIS is the superior option right now.


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