Investors interested in Film and Television Production and Distribution stocks are likely familiar with Imax (IMAX) and Live Nation (LYV). 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.
Right now, Imax is sporting a Zacks Rank of #2 (Buy), while Live Nation 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 IMAX has an improving earnings outlook. However, value investors will care about much more than just this.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.
IMAX currently has a forward P/E ratio of 22.36, while LYV has a forward P/E of 67.72. We also note that IMAX has a PEG ratio of 1.33. 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. LYV currently has a PEG ratio of 9.34.
Another notable valuation metric for IMAX is its P/B ratio of 4.25. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, LYV has a P/B of 30.36.
These are just a few of the metrics contributing to IMAX's Value grade of B and LYV's Value grade of C.
IMAX stands above LYV thanks to its solid earnings outlook, and based on these valuation figures, we also feel that IMAX is the superior value option right now.
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IMAX Corporation (IMAX): Free Stock Analysis Report Live Nation Entertainment, Inc. (LYV): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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