Back to top

Image: Bigstock

OSIS vs. OLED: Which Stock Is the Better Value Option?

Read MoreHide Full Article

Investors with an interest in Electronics - Miscellaneous Components stocks have likely encountered both OSI Systems (OSIS) and Universal Display Corp. (OLED - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? 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.

Both OSI Systems and Universal Display Corp. have a Zacks Rank of # 2 (Buy) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. 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.

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.

OSIS currently has a forward P/E ratio of 21.35, while OLED has a forward P/E of 64.18. We also note that OSIS has a PEG ratio of 1.71. 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. OLED currently has a PEG ratio of 2.14.

Another notable valuation metric for OSIS is its P/B ratio of 3.41. 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, OLED has a P/B of 11.95.

These metrics, and several others, help OSIS earn a Value grade of B, while OLED has been given a Value grade of D.

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


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Universal Display Corporation (OLED) - free report >>

Published in