OSIS or TEL: Which Is the Better Value Stock Right Now?
Investors interested in Electronics - Miscellaneous Components stocks are likely familiar with OSI Systems (OSIS) and TE Connectivity (TEL). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, OSI Systems is sporting a Zacks Rank of #2 (Buy), while TE Connectivity has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that OSIS likely has seen a stronger improvement to its earnings outlook than TEL has recently. But this is only part of the picture 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.
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.
OSIS currently has a forward P/E ratio of 15.69, while TEL has a forward P/E of 19.06. We also note that OSIS has a PEG ratio of 1.43. 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. TEL currently has a PEG ratio of 1.96.
Another notable valuation metric for OSIS is its P/B ratio of 2.77. 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, TEL has a P/B of 3.47.
These metrics, and several others, help OSIS earn a Value grade of B, while TEL has been given a Value grade of C.
OSIS sticks out from TEL in both our Zacks Rank and Style Scores models, so value investors will likely feel that OSIS is the better option right now.
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OSI Systems, Inc. (OSIS) : Free Stock Analysis Report
TE Connectivity Ltd. (TEL) : Free Stock Analysis Report