TV vs. NFLX: Which Stock Is the Better Value Option?
Investors looking for stocks in the Broadcast Radio and Television sector might want to consider either Grupo Televisa (TV) or Netflix (NFLX). 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Grupo Televisa has a Zacks Rank of #2 (Buy), while Netflix has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that TV likely has seen a stronger improvement to its earnings outlook than NFLX has recently. 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.
TV currently has a forward P/E ratio of 36.29, while NFLX has a forward P/E of 49. We also note that TV has a PEG ratio of 0.65. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. NFLX currently has a PEG ratio of 1.60.
Another notable valuation metric for TV is its P/B ratio of 1.76. 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, NFLX has a P/B of 16.37.
These are just a few of the metrics contributing to TV's Value grade of A and NFLX's Value grade of D.
TV stands above NFLX thanks to its solid earnings outlook, and based on these valuation figures, we also feel that TV is the superior value option right now.
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Grupo Televisa S.A. (TV): Free Stock Analysis Report
Netflix, Inc. (NFLX): Free Stock Analysis Report
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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.