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DL or YNDX: Which Is the Better Value Stock Right Now?

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Investors with an interest in Internet - Content stocks have likely encountered both China Distance and Yandex (YNDX - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

China Distance has a Zacks Rank of #2 (Buy), while Yandex has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that DL has an improving earnings outlook. But this is just one factor that value investors are interested in.

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 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.

DL currently has a forward P/E ratio of 9.19, while YNDX has a forward P/E of 34.04. We also note that DL has a PEG ratio of 0.61. 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. YNDX currently has a PEG ratio of 0.91.

Another notable valuation metric for DL is its P/B ratio of 2.18. 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, YNDX has a P/B of 4.21.

Based on these metrics and many more, DL holds a Value grade of A, while YNDX has a Value grade of C.

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


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