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HPE vs. SIMO: Which Stock Is the Better Value Option?
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Investors with an interest in Computer - Integrated Systems stocks have likely encountered both Hewlett Packard Enterprise (HPE - Free Report) and Silicon Motion (SIMO - 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.
Hewlett Packard Enterprise has a Zacks Rank of #2 (Buy), while Silicon Motion has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that HPE is likely seeing its earnings outlook improve to a greater extent. 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 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.
HPE currently has a forward P/E ratio of 11.90, while SIMO has a forward P/E of 23.57. We also note that HPE has a PEG ratio of 2.68. 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. SIMO currently has a PEG ratio of 3.35.
Another notable valuation metric for HPE is its P/B ratio of 1.23. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, SIMO has a P/B of 3.4.
These are just a few of the metrics contributing to HPE's Value grade of A and SIMO's Value grade of F.
HPE stands above SIMO thanks to its solid earnings outlook, and based on these valuation figures, we also feel that HPE is the superior value option right now.
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HPE vs. SIMO: Which Stock Is the Better Value Option?
Investors with an interest in Computer - Integrated Systems stocks have likely encountered both Hewlett Packard Enterprise (HPE - Free Report) and Silicon Motion (SIMO - 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.
Hewlett Packard Enterprise has a Zacks Rank of #2 (Buy), while Silicon Motion has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that HPE is likely seeing its earnings outlook improve to a greater extent. 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 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.
HPE currently has a forward P/E ratio of 11.90, while SIMO has a forward P/E of 23.57. We also note that HPE has a PEG ratio of 2.68. 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. SIMO currently has a PEG ratio of 3.35.
Another notable valuation metric for HPE is its P/B ratio of 1.23. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, SIMO has a P/B of 3.4.
These are just a few of the metrics contributing to HPE's Value grade of A and SIMO's Value grade of F.
HPE stands above SIMO thanks to its solid earnings outlook, and based on these valuation figures, we also feel that HPE is the superior value option right now.