YELP vs. RELX: Which Stock Is the Better Value Option?
Investors with an interest in Internet - Content stocks have likely encountered both Yelp (YELP) and RELX PLC (RELX). 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.
Right now, Yelp is sporting a Zacks Rank of #1 (Strong Buy), while RELX PLC has a Zacks Rank of #2 (Buy). Investors should feel comfortable knowing that YELP likely has seen a stronger improvement to its earnings outlook than RELX has recently. But this is just one factor that value investors are interested in.
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.
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.
YELP currently has a forward P/E ratio of 21.02, while RELX has a forward P/E of 30.11. We also note that YELP has a PEG ratio of 0.81. 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. RELX currently has a PEG ratio of 3.40.
Another notable valuation metric for YELP is its P/B ratio of 3.18. 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, RELX has a P/B of 21.25.
These are just a few of the metrics contributing to YELP's Value grade of A and RELX's Value grade of F.
YELP stands above RELX thanks to its solid earnings outlook, and based on these valuation figures, we also feel that YELP is the superior value option right now.
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RELX PLC (RELX) : Free Stock Analysis Report
