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COMM vs. CALX: Which Stock Should Value Investors Buy Now?

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Investors with an interest in Communication - Infrastructure stocks have likely encountered both CommScope (COMM - Free Report) and Calix (CALX - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

CommScope and Calix are both sporting a Zacks Rank of # 2 (Buy) right now. Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. But this is just one factor that value investors are interested in.

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 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.

COMM currently has a forward P/E ratio of 9.47, while CALX has a forward P/E of 29.69. We also note that COMM has a PEG ratio of 2.37. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. CALX currently has a PEG ratio of 4.95.

Another notable valuation metric for COMM is its P/B ratio of 2.34. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, CALX has a P/B of 2.70.

Based on these metrics and many more, COMM holds a Value grade of A, while CALX has a Value grade of F.

Both COMM and CALX are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that COMM is the superior value option right now.


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