Investors with an interest in Broadcast Radio and Television stocks have likely encountered both AMC Networks (AMCX) and Netflix (NFLX). 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, AMC Networks has a Zacks Rank of #2 (Buy), while Netflix has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that AMCX is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture for value investors.
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 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.
AMCX currently has a forward P/E ratio of 5.57, while NFLX has a forward P/E of 82.93. We also note that AMCX has a PEG ratio of 0.61. 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. NFLX currently has a PEG ratio of 2.76.
Another notable valuation metric for AMCX is its P/B ratio of 4.77. 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, NFLX has a P/B of 19.33.
These metrics, and several others, help AMCX earn a Value grade of A, while NFLX has been given a Value grade of F.
AMCX sticks out from NFLX in both our Zacks Rank and Style Scores models, so value investors will likely feel that AMCX is the better option right now.
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AMC Networks Inc. (AMCX) : Free Stock Analysis Report
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