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INTC vs. NVDA: Which Stock Is the Better Value Option?

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Investors interested in stocks from the Semiconductor - General sector have probably already heard of Intel (INTC - Free Report) and Nvidia (NVDA - 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.

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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, Intel is sporting a Zacks Rank of #2 (Buy), while Nvidia has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that INTC likely has seen a stronger improvement to its earnings outlook than NVDA has recently. But this is only part of the picture 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 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.

INTC currently has a forward P/E ratio of 13.30, while NVDA has a forward P/E of 44.19. We also note that INTC has a PEG ratio of 1.77. 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. NVDA currently has a PEG ratio of 4.73.

Another notable valuation metric for INTC is its P/B ratio of 3.66. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, NVDA has a P/B of 13.40.

These are just a few of the metrics contributing to INTC's Value grade of B and NVDA's Value grade of F.

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


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