Investors looking for stocks in the Wireless Equipment sector might want to consider either Juniper Networks (JNPR - Free Report) or InterDigital (IDCC - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Juniper Networks and InterDigital are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that JNPR likely has seen a stronger improvement to its earnings outlook than IDCC 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.
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.
JNPR currently has a forward P/E ratio of 15.35, while IDCC has a forward P/E of 91.11. We also note that JNPR has a PEG ratio of 2.68. 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 6.07.
Another notable valuation metric for JNPR is its P/B ratio of 2.21. 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, IDCC has a P/B of 2.75.
Based on these metrics and many more, JNPR holds a Value grade of B, while IDCC has a Value grade of F.
JNPR sticks out from IDCC in both our Zacks Rank and Style Scores models, so value investors will likely feel that JNPR is the better option right now.