Investors interested in Broadcast Radio and Television stocks are likely familiar with Townsquare Media (TSQ - Free Report) and E.W. Scripps (SSP - 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.
Townsquare Media has a Zacks Rank of #2 (Buy), while E.W. Scripps has a Zacks Rank of #3 (Hold) right now. This means that TSQ's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors.
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.
TSQ currently has a forward P/E ratio of 9.09, while SSP has a forward P/E of 22.65. We also note that TSQ has a PEG ratio of 2.02. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. SSP currently has a PEG ratio of 2.16.
Another notable valuation metric for TSQ is its P/B ratio of 0.42. 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, SSP has a P/B of 1.45.
Based on these metrics and many more, TSQ holds a Value grade of A, while SSP has a Value grade of C.
TSQ 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 TSQ is likely the superior value option right now.