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VPG vs. TEL: Which Stock Should Value Investors Buy Now?

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Investors interested in Electronics - Miscellaneous Components stocks are likely familiar with Vishay Precision (VPG - Free Report) and TE Connectivity (TEL - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Currently, Vishay Precision has a Zacks Rank of #2 (Buy), while TE Connectivity has a Zacks Rank of #3 (Hold). This means that VPG's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.

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 Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

VPG currently has a forward P/E ratio of 15.54, while TEL has a forward P/E of 16.10. We also note that VPG has a PEG ratio of 0.78. 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. TEL currently has a PEG ratio of 1.47.

Another notable valuation metric for VPG is its P/B ratio of 1.17. 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, TEL has a P/B of 2.22.

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

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


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