JNPR or IDCC: Which Is the Better Value Stock Right Now?
Investors interested in Wireless Equipment stocks are likely familiar with Juniper Networks (JNPR) and InterDigital (IDCC). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, Juniper Networks has a Zacks Rank of #2 (Buy), while InterDigital has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that JNPR has an improving earnings outlook. But this is only part of the picture for value investors.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks 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.
JNPR currently has a forward P/E ratio of 15.45, while IDCC has a forward P/E of 106.95. We also note that JNPR has a PEG ratio of 2.50. 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. IDCC currently has a PEG ratio of 7.13.
Another notable valuation metric for JNPR is its P/B ratio of 1.94. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, IDCC has a P/B of 2.51.
Based on these metrics and many more, JNPR holds a Value grade of B, while IDCC has a Value grade of D.
JNPR sticks out from IDCC in both our Zacks Rank and Style Scores models, so value investors will likely feel that JNPR is the better option right now.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.