Investors looking for stocks in the Electronics - Miscellaneous Components sector might want to consider either Omron Corp. (OMRNY) or Vishay Precision (VPG). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
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.
Currently, Omron Corp. has a Zacks Rank of #2 (Buy), while Vishay Precision has a Zacks Rank of #5 (Strong Sell). This means that OMRNY's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.
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.
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.
OMRNY currently has a forward P/E ratio of 26.84, while VPG has a forward P/E of 61.72. We also note that OMRNY has a PEG ratio of 0.51. 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. VPG currently has a PEG ratio of 3.09.
Another notable valuation metric for OMRNY is its P/B ratio of 1.06. 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, VPG has a P/B of 1.84.
Based on these metrics and many more, OMRNY holds a Value grade of B, while VPG has a Value grade of F.
OMRNY stands above VPG thanks to its solid earnings outlook, and based on these valuation figures, we also feel that OMRNY is the superior value option right now.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Omron Corp. (OMRNY): Free Stock Analysis Report Vishay Precision Group, Inc. (VPG): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
