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

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Investors with an interest in Electronics - Miscellaneous Components stocks have likely encountered both TDK Corp. (TTDKY - Free Report) and OSI Systems (OSIS - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? 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.

Currently, both TDK Corp. and OSI Systems are holding a Zacks Rank of #2 (Buy). 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 also tend to look at a number of traditional, tried-and-true figures to help them find stocks 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.

TTDKY currently has a forward P/E ratio of 20.85, while OSIS has a forward P/E of 25.89. We also note that TTDKY has a PEG ratio of 1.35. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. OSIS currently has a PEG ratio of 2.24.

Another notable valuation metric for TTDKY is its P/B ratio of 2.1. 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, OSIS has a P/B of 4.84.

Based on these metrics and many more, TTDKY holds a Value grade of A, 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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