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TTDKY vs. OSIS: 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 TDK Corp. (TTDKY - Free Report) or OSI Systems (OSIS - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

TDK Corp. and OSI Systems are both sporting a Zacks Rank of # 2 (Buy) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. However, value investors will care about much more than just this.

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 Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

TTDKY currently has a forward P/E ratio of 15.45, while OSIS has a forward P/E of 16.82. We also note that TTDKY has a PEG ratio of 0.82. 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. OSIS currently has a PEG ratio of 1.53.

Another notable valuation metric for TTDKY is its P/B ratio of 1.52. 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, OSIS has a P/B of 2.85.

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

Both TTDKY and OSIS are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that TTDKY is the superior value option right now.


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