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

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Investors interested in Electronics - Miscellaneous Components stocks are likely familiar with CTS (CTS - 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.

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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, CTS has a Zacks Rank of #2 (Buy), while OSI Systems has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that CTS likely has seen a stronger improvement to its earnings outlook than OSIS has recently. 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.

CTS currently has a forward P/E ratio of 21.24, while OSIS has a forward P/E of 26.21. We also note that CTS has a PEG ratio of 1.33. 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 2.24.

Another notable valuation metric for CTS is its P/B ratio of 2.7. 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 5.34.

These are just a few of the metrics contributing to CTS's Value grade of B and OSIS's Value grade of C.

CTS is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that CTS is likely the superior value option right now.

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