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KYOCY or TEL: Which Is the Better Value Stock Right Now?

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Investors interested in Electronics - Miscellaneous Components stocks are likely familiar with Kyocera (KYOCY - Free Report) and TE Connectivity (TEL - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great 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.

Currently, Kyocera has a Zacks Rank of #2 (Buy), while TE Connectivity has a Zacks Rank of #4 (Sell). This means that KYOCY's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors.

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.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

KYOCY currently has a forward P/E ratio of 15.88, while TEL has a forward P/E of 16.48. We also note that KYOCY has a PEG ratio of 1.24. 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. TEL currently has a PEG ratio of 1.54.

Another notable valuation metric for KYOCY is its P/B ratio of 1.02. 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, TEL has a P/B of 2.88.

These metrics, and several others, help KYOCY earn a Value grade of B, while TEL has been given a Value grade of C.

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


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