Investors with an interest in Broadcast Radio and Television stocks have likely encountered both Gray Television (GTN - Free Report) and Grupo Televisa (TV - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? 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.
Gray Television has a Zacks Rank of #2 (Buy), while Grupo Televisa has a Zacks Rank of #4 (Sell) right now. Investors should feel comfortable knowing that GTN likely has seen a stronger improvement to its earnings outlook than TV has recently. However, value investors will care about much more than just this.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
GTN currently has a forward P/E ratio of 6.23, while TV has a forward P/E of 20.96. We also note that GTN has a PEG ratio of 0.62. 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. TV currently has a PEG ratio of 0.66.
Another notable valuation metric for GTN is its P/B ratio of 1.16. 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, TV has a P/B of 1.30.
Based on these metrics and many more, GTN holds a Value grade of A, while TV has a Value grade of C.
GTN has seen stronger estimate revision activity and sports more attractive valuation metrics than TV, so it seems like value investors will conclude that GTN is the superior option right now.