Investors with an interest in Semiconductor - Analog and Mixed stocks have likely encountered both NXP Semiconductors (NXPI - Free Report) and Silicon Laboratories (SLAB - 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.
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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, NXP Semiconductors has a Zacks Rank of #2 (Buy), while Silicon Laboratories has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that NXPI has an improving earnings outlook. But this is only part of the picture 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.
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.
NXPI currently has a forward P/E ratio of 12.40, while SLAB has a forward P/E of 33.51. We also note that NXPI has a PEG ratio of 0.99. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. SLAB currently has a PEG ratio of 2.09.
Another notable valuation metric for NXPI is its P/B ratio of 3.21. 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, SLAB has a P/B of 4.22.
These are just a few of the metrics contributing to NXPI's Value grade of B and SLAB's Value grade of D.
NXPI 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 NXPI is likely the superior value option right now.