Yahoo Finance OSIS or OLED: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Electronics - Miscellaneous Components sector have probably already heard of OSI Systems (OSIS) and Universal Display Corp. (OLED). 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
OSI Systems and Universal Display Corp. 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 OSIS is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.
OSIS currently has a forward P/E ratio of 19.82, while OLED has a forward P/E of 38.01. We also note that OSIS has a PEG ratio of 1.80. 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. OLED currently has a PEG ratio of 2.42.
Another notable valuation metric for OSIS is its P/B ratio of 3.03. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, OLED has a P/B of 5.33.
Based on these metrics and many more, OSIS holds a Value grade of B, while OLED has a Value grade of D.
OSIS 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 OSIS is likely the superior value option right now.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
OSI Systems, Inc. (OSIS) : Free Stock Analysis Report
Universal Display Corporation (OLED) : Free Stock Analysis Report
