LVS vs. TTWO: Which Stock Is the Better Value Option?

Investors looking for stocks in the Gaming sector might want to consider either Las Vegas Sands (LVS) or Take-Two Interactive (TTWO). 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Right now, Las Vegas Sands is sporting a Zacks Rank of #2 (Buy), while Take-Two Interactive has a Zacks Rank of #4 (Sell). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that LVS has an improving earnings 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 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.

LVS currently has a forward P/E ratio of 19.84, while TTWO has a forward P/E of 89.87. We also note that LVS has a PEG ratio of 1.71. 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. TTWO currently has a PEG ratio of 2.64.

Another notable valuation metric for LVS is its P/B ratio of 11.26. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, TTWO has a P/B of 20.09.

These metrics, and several others, help LVS earn a Value grade of B, while TTWO has been given a Value grade of D.

LVS has seen stronger estimate revision activity and sports more attractive valuation metrics than TTWO, so it seems like value investors will conclude that LVS is the superior option right now.

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

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