APELY vs. OLED: Which Stock Is the Better Value Option?

Investors interested in Electronics - Miscellaneous Components stocks are likely familiar with Alps Electric (APELY) and Universal Display Corp. (OLED). 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.

Alps Electric and Universal Display Corp. are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that APELY likely has seen a stronger improvement to its earnings outlook than OLED has recently. However, value investors will care about much more than just this.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies 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.

APELY currently has a forward P/E ratio of 16.98, while OLED has a forward P/E of 30.85. We also note that APELY has a PEG ratio of 0.44. 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. OLED currently has a PEG ratio of 1.69.

Another notable valuation metric for APELY is its P/B ratio of 0.74. 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, OLED has a P/B of 4.4.

These are just a few of the metrics contributing to APELY's Value grade of A and OLED's Value grade of D.

APELY is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that APELY is likely the superior value option right now.

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This article originally published on Zacks Investment Research (zacks.com).

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