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

Zacks Equity Research

Investors interested in stocks from the Semiconductor - General sector have probably already heard of Intel (INTC) and Texas Instruments (TXN). But which of these two companies is the best option for those looking for undervalued stocks? 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, Intel has a Zacks Rank of #2 (Buy), while Texas Instruments has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that INTC likely has seen a stronger improvement to its earnings outlook than TXN has recently. 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.

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 11.43, while TXN has a forward P/E of 22.47. We also note that INTC has a PEG ratio of 1.52. 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. TXN currently has a PEG ratio of 2.41.

Another notable valuation metric for INTC is its P/B ratio of 3.15. 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 12.04.

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

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


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Intel Corporation (INTC) : Free Stock Analysis Report
 
Texas Instruments Incorporated (TXN) : Free Stock Analysis Report
 
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