Back to top

Image: Bigstock

DINRF or STM: Which Is the Better Value Stock Right Now?

Read MoreHide Full Article

Investors looking for stocks in the Semiconductor - General sector might want to consider either Screen Holdings Co., Ltd (DINRF - Free Report) or STMicroelectronics (STM - 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Right now, Screen Holdings Co., Ltd is sporting a Zacks Rank of #1 (Strong Buy), while STMicroelectronics has a Zacks Rank of #2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that DINRF is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.

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 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.

DINRF currently has a forward P/E ratio of 11.30, while STM has a forward P/E of 19.64. We also note that DINRF has a PEG ratio of 1.13. 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. STM currently has a PEG ratio of 3.93.

Another notable valuation metric for DINRF is its P/B ratio of 1.11. 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, STM has a P/B of 3.70.

These are just a few of the metrics contributing to DINRF's Value grade of A and STM's Value grade of C.

DINRF stands above STM thanks to its solid earnings outlook, and based on these valuation figures, we also feel that DINRF is the superior value option right now.


See More Zacks Research for These Tickers


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


STMicroelectronics N.V. (STM) - free report >>

Screen Holdings Co., Ltd (DINRF) - free report >>

Published in