Yahoo Finance NXPI vs. MPWR: Which Stock Is the Better Value Option?
Investors with an interest in Semiconductor - Analog and Mixed stocks have likely encountered both NXP Semiconductors (NXPI) and Monolithic Power (MPWR). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, NXP Semiconductors has a Zacks Rank of #2 (Buy), while Monolithic Power 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 NXPI has an improving earnings outlook. But this is just one factor that value investors are interested in.
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.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
NXPI currently has a forward P/E ratio of 12.71, while MPWR has a forward P/E of 31.54. We also note that NXPI has a PEG ratio of 0.58. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. MPWR currently has a PEG ratio of 1.26.
Another notable valuation metric for NXPI is its P/B ratio of 5.49. 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, MPWR has a P/B of 11.15.
Based on these metrics and many more, NXPI holds a Value grade of B, while MPWR has a Value grade of D.
NXPI sticks out from MPWR in both our Zacks Rank and Style Scores models, so value investors will likely feel that NXPI is the better option right now.
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NXP Semiconductors N.V. (NXPI) : Free Stock Analysis Report
Monolithic Power Systems, Inc. (MPWR) : Free Stock Analysis Report
