CMTL or MSI: Which Is the Better Value Stock Right Now?
Investors interested in Wireless Equipment stocks are likely familiar with Comtech Telecommunications (CMTL) and Motorola (MSI). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 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.
Right now, Comtech Telecommunications is sporting a Zacks Rank of #2 (Buy), while Motorola has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that CMTL likely has seen a stronger improvement to its earnings outlook than MSI 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.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
CMTL currently has a forward P/E ratio of 8.07, while MSI has a forward P/E of 24.58. We also note that CMTL has a PEG ratio of 1.01. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. MSI currently has a PEG ratio of 2.26.
Another notable valuation metric for CMTL is its P/B ratio of 0.68. 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, MSI has a P/B of 134.16.
These are just a few of the metrics contributing to CMTL's Value grade of B and MSI's Value grade of D.
CMTL 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 CMTL is likely the superior value option right now.
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Comtech Telecommunications Corp. (CMTL) : Free Stock Analysis Report
Motorola Solutions, Inc. (MSI) : Free Stock Analysis Report
