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INTC vs. TXN: Which Stock Is the Better Value Option?

Zacks Equity Research
·2 min read

Investors with an interest in Semiconductor - General stocks have likely encountered both Intel (INTC) and Texas Instruments (TXN). 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.

Intel and Texas Instruments are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that INTC has an improving earnings outlook. But this is just one piece of the puzzle for value investors.

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.

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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.

INTC currently has a forward P/E ratio of 13.27, while TXN has a forward P/E of 25.70. We also note that INTC has a PEG ratio of 1.77. 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. TXN currently has a PEG ratio of 2.75.

Another notable valuation metric for INTC is its P/B ratio of 3.66. 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, TXN has a P/B of 13.65.

Based on these metrics and many more, INTC holds a Value grade of B, while TXN has a Value grade of D.

INTC sticks out from TXN in both our Zacks Rank and Style Scores models, so value investors will likely feel that INTC is the better option right now.


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