UMC vs. LSCC: Which Stock Should Value Investors Buy Now?

Investors interested in stocks from the Electronics - Semiconductors sector have probably already heard of United Microelectronics Corporation (UMC) and Lattice Semiconductor (LSCC). 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.

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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

United Microelectronics Corporation and Lattice Semiconductor are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that UMC is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.

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.

UMC currently has a forward P/E ratio of 14.91, while LSCC has a forward P/E of 69.78. We also note that UMC has a PEG ratio of 0.55. 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. LSCC currently has a PEG ratio of 6.98.

Another notable valuation metric for UMC is its P/B ratio of 3.16. 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, LSCC has a P/B of 22.66.

These are just a few of the metrics contributing to UMC's Value grade of A and LSCC's Value grade of F.

UMC 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 UMC is likely the superior value option right now.

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United Microelectronics Corporation (UMC) : Free Stock Analysis Report
 
Lattice Semiconductor Corporation (LSCC) : Free Stock Analysis Report
 
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