Investors interested in Electronics - Measuring Instruments stocks are likely familiar with Advantest Corp. (ATEYY - Free Report) and Keysight (KEYS - 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.
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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Advantest Corp. and Keysight are both sporting 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 factor that value investors are interested in.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.
ATEYY currently has a forward P/E ratio of 17.43, while KEYS has a forward P/E of 17.50. We also note that ATEYY has a PEG ratio of 1.12. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. KEYS currently has a PEG ratio of 1.92.
Another notable valuation metric for ATEYY is its P/B ratio of 3.72. 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, KEYS has a P/B of 5.87.
These are just a few of the metrics contributing to ATEYY's Value grade of B and KEYS's Value grade of D.
Both ATEYY and KEYS are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that ATEYY is the superior value option right now.