Investors interested in Semiconductor - General stocks are likely familiar with Intel (INTC) and Texas Instruments (TXN). 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 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.
Intel has a Zacks Rank of #2 (Buy), while Texas Instruments has a Zacks Rank of #4 (Sell) right now. Investors should feel comfortable knowing that INTC likely has seen a stronger improvement to its earnings outlook than TXN has recently. But this is just one piece of the puzzle for value investors.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether 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 12.63, while TXN has a forward P/E of 23.17. We also note that INTC has a PEG ratio of 1.68. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. TXN currently has a PEG ratio of 2.29.
Another notable valuation metric for INTC is its P/B ratio of 3.41. 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, TXN has a P/B of 12.38.
These metrics, and several others, help INTC earn a Value grade of A, while TXN has been given a Value grade of D.
INTC sticks out from TXN in both our Zacks Rank and Style Scores models, so value investors will likely feel that INTC is the better option right now.
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Intel Corporation (INTC): Free Stock Analysis Report
Texas Instruments Incorporated (TXN): Free Stock Analysis Report
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