Investors looking for stocks in the Semiconductor - General sector might want to consider either Intel (INTC) or Texas Instruments (TXN). 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.
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 #4 (Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that INTC 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.
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.
INTC currently has a forward P/E ratio of 12.40, while TXN has a forward P/E of 24.60. We also note that INTC has a PEG ratio of 1.65. 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. TXN currently has a PEG ratio of 2.43.
Another notable valuation metric for INTC is its P/B ratio of 3.35. 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 13.15.
Based on these metrics and many more, INTC holds a Value grade of A, while TXN has a Value grade of D.
INTC stands above TXN thanks to its solid earnings outlook, and based on these valuation figures, we also feel that INTC is the superior value 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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