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MG vs. SITM: Which Stock Should Value Investors Buy Now?

Zacks Equity Research
·2 min read

Investors looking for stocks in the Electronics - Miscellaneous Products sector might want to consider either Mistras (MG) or SiTime (SITM). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Currently, both Mistras and SiTime are holding a Zacks Rank of # 2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. But this is just one piece of the puzzle for value investors.

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.

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Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

MG currently has a forward P/E ratio of 48.09, while SITM has a forward P/E of 74.97. We also note that MG has a PEG ratio of 1.48. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. SITM currently has a PEG ratio of 5.

Another notable valuation metric for MG is its P/B ratio of 1.62. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, SITM has a P/B of 5.38.

These metrics, and several others, help MG earn a Value grade of B, while SITM has been given a Value grade of F.

Both MG and SITM are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that MG is the superior value option right now.


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Mistras Group Inc (MG) : Free Stock Analysis Report
 
SiTime Corporation (SITM) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research