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STM vs. TXN: Which Stock Should Value Investors Buy Now?
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Investors interested in Semiconductor - General stocks are likely familiar with STMicroelectronics (STM - Free Report) and Texas Instruments (TXN - 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.
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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, STMicroelectronics has a Zacks Rank of #1 (Strong Buy), while Texas Instruments has a Zacks Rank of #2 (Buy). Investors should feel comfortable knowing that STM likely has seen a stronger improvement to its earnings outlook than TXN 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.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
STM currently has a forward P/E ratio of 8.89, while TXN has a forward P/E of 17.43. We also note that STM has a PEG ratio of 1.78. 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. TXN currently has a PEG ratio of 1.87.
Another notable valuation metric for STM is its P/B ratio of 3.07. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, TXN has a P/B of 10.57.
These are just a few of the metrics contributing to STM's Value grade of B and TXN's Value grade of C.
STM stands above TXN thanks to its solid earnings outlook, and based on these valuation figures, we also feel that STM is the superior value option right now.
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STM vs. TXN: Which Stock Should Value Investors Buy Now?
Investors interested in Semiconductor - General stocks are likely familiar with STMicroelectronics (STM - Free Report) and Texas Instruments (TXN - 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.
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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, STMicroelectronics has a Zacks Rank of #1 (Strong Buy), while Texas Instruments has a Zacks Rank of #2 (Buy). Investors should feel comfortable knowing that STM likely has seen a stronger improvement to its earnings outlook than TXN 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.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
STM currently has a forward P/E ratio of 8.89, while TXN has a forward P/E of 17.43. We also note that STM has a PEG ratio of 1.78. 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. TXN currently has a PEG ratio of 1.87.
Another notable valuation metric for STM is its P/B ratio of 3.07. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, TXN has a P/B of 10.57.
These are just a few of the metrics contributing to STM's Value grade of B and TXN's Value grade of C.
STM stands above TXN thanks to its solid earnings outlook, and based on these valuation figures, we also feel that STM is the superior value option right now.