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RELX PLC (RELX) - free report >>
Tencent Music Entertainment Group Sponsored ADR (TME) - free report >>
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RELX PLC (RELX) - free report >>
Tencent Music Entertainment Group Sponsored ADR (TME) - free report >>
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TME or RELX: Which Is the Better Value Stock Right Now?
Investors with an interest in Internet - Content stocks have likely encountered both Tencent Music Entertainment Group Sponsored ADR (TME - Free Report) and RELX PLC (RELX - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Tencent Music Entertainment Group Sponsored ADR and RELX PLC are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. This means that TME's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. 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 Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
TME currently has a forward P/E ratio of 13.97, while RELX has a forward P/E of 23.90. We also note that TME has a PEG ratio of 1.01. 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. RELX currently has a PEG ratio of 2.34.
Another notable valuation metric for TME is its P/B ratio of 0.96. 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, RELX has a P/B of 12.10.
Based on these metrics and many more, TME holds a Value grade of B, while RELX has a Value grade of D.
TME stands above RELX thanks to its solid earnings outlook, and based on these valuation figures, we also feel that TME is the superior value option right now.