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NXPI vs. SLAB: Which Stock Is the Better Value Option?

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Investors interested in Semiconductor - Analog and Mixed stocks are likely familiar with NXP Semiconductors (NXPI - Free Report) and Silicon Laboratories (SLAB - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

NXP Semiconductors and Silicon Laboratories are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that NXPI's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. 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.

NXPI currently has a forward P/E ratio of 11.95, while SLAB has a forward P/E of 31.83. We also note that NXPI has a PEG ratio of 0.96. 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. SLAB currently has a PEG ratio of 2.12.

Another notable valuation metric for NXPI is its P/B ratio of 3.10. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, SLAB has a P/B of 4.01.

Based on these metrics and many more, NXPI holds a Value grade of B, while SLAB has a Value grade of D.

NXPI sticks out from SLAB in both our Zacks Rank and Style Scores models, so value investors will likely feel that NXPI is the better option right now.


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NXP Semiconductors N.V. (NXPI) - free report >>

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