Yahoo Finance PHG or GRMN: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Electronics - Miscellaneous Products sector might want to consider either Royal Philips (PHG) or Garmin (GRMN). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Royal Philips has a Zacks Rank of #1 (Strong Buy), while Garmin has a Zacks Rank of #2 (Buy) right now. This means that PHG's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks 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.
PHG currently has a forward P/E ratio of 17.17, while GRMN has a forward P/E of 17.24. We also note that PHG has a PEG ratio of 1.52. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. GRMN currently has a PEG ratio of 2.35.
Another notable valuation metric for PHG is its P/B ratio of 2.53. 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, GRMN has a P/B of 3.12.
Based on these metrics and many more, PHG holds a Value grade of B, while GRMN has a Value grade of C.
PHG stands above GRMN thanks to its solid earnings outlook, and based on these valuation figures, we also feel that PHG is the superior value option right now.
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Koninklijke Philips N.V. (PHG) : Free Stock Analysis Report
Garmin Ltd. (GRMN) : Free Stock Analysis Report
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