Investors interested in stocks from the Internet - Content sector have probably already heard of China Distance (DL - Free Report) and Yandex (YNDX - 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.
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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
China Distance has a Zacks Rank of #1 (Strong Buy), while Yandex has a Zacks Rank of #3 (Hold) right now. This means that DL's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture for value investors.
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.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
DL currently has a forward P/E ratio of 9.12, while YNDX has a forward P/E of 42.74. 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 1.32.
Another notable valuation metric for DL is its P/B ratio of 1.78. 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 4.44.
These are just a few of the metrics contributing to DL's Value grade of A and YNDX's Value grade of C.
DL stands above YNDX thanks to its solid earnings outlook, and based on these valuation figures, we also feel that DL is the superior value option right now.