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ERIC vs. IDCC: Which Stock Is the Better Value Option?
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Investors with an interest in Wireless Equipment stocks have likely encountered both Ericsson (ERIC - Free Report) and InterDigital (IDCC - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Both Ericsson and InterDigital have a Zacks Rank of #2 (Buy) right now. This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. 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.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
ERIC currently has a forward P/E ratio of 14.52, while IDCC has a forward P/E of 28.17. We also note that ERIC has a PEG ratio of 1.72. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. IDCC currently has a PEG ratio of 1.88.
Another notable valuation metric for ERIC is its P/B ratio of 3.19. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, IDCC has a P/B of 9.28.
These are just a few of the metrics contributing to ERIC's Value grade of B and IDCC's Value grade of D.
Both ERIC and IDCC are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that ERIC is the superior value option right now.
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ERIC vs. IDCC: Which Stock Is the Better Value Option?
Investors with an interest in Wireless Equipment stocks have likely encountered both Ericsson (ERIC - Free Report) and InterDigital (IDCC - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Both Ericsson and InterDigital have a Zacks Rank of #2 (Buy) right now. This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. 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.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
ERIC currently has a forward P/E ratio of 14.52, while IDCC has a forward P/E of 28.17. We also note that ERIC has a PEG ratio of 1.72. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. IDCC currently has a PEG ratio of 1.88.
Another notable valuation metric for ERIC is its P/B ratio of 3.19. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, IDCC has a P/B of 9.28.
These are just a few of the metrics contributing to ERIC's Value grade of B and IDCC's Value grade of D.
Both ERIC and IDCC are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that ERIC is the superior value option right now.