Investors interested in Broadcast Radio and Television stocks are likely familiar with Gray Television (GTN - Free Report) and British Sky Broadcasting Group PLC (SKYAY - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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.
Gray Television and British Sky Broadcasting Group PLC are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that GTN is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.
GTN currently has a forward P/E ratio of 9.15, while SKYAY has a forward P/E of 24.92. We also note that GTN has a PEG ratio of 0.91. 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. SKYAY currently has a PEG ratio of 1.92.
Another notable valuation metric for GTN is its P/B ratio of 1.61. 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, SKYAY has a P/B of 6.95.
Based on these metrics and many more, GTN holds a Value grade of A, while SKYAY has a Value grade of D.
GTN has seen stronger estimate revision activity and sports more attractive valuation metrics than SKYAY, so it seems like value investors will conclude that GTN is the superior option right now.