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TTDKY vs. OSIS: Which Stock Should Value Investors Buy Now?

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Investors interested in Electronics - Miscellaneous Components stocks are likely familiar with TDK Corp. (TTDKY - Free Report) and 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.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive 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). 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 just one factor that value investors are interested in.

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 18.79, while OSIS has a forward P/E of 27.52. We also note that TTDKY has a PEG ratio of 1.07. 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. OSIS currently has a PEG ratio of 2.38.

Another notable valuation metric for TTDKY is its P/B ratio of 1.9. 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 5.14.

These are just a few of the metrics contributing to TTDKY's Value grade of A and OSIS's 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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