CMTL vs. MSI: Which Stock Is the Better Value Option?
Investors with an interest in Wireless Equipment stocks have likely encountered both Comtech Telecommunications (CMTL) and Motorola (MSI). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.
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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with 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 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.
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.
CMTL currently has a forward P/E ratio of 9.35, while MSI has a forward P/E of 27.41. We also note that CMTL has a PEG ratio of 1.17. 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. MSI currently has a PEG ratio of 2.77.
Another notable valuation metric for CMTL is its P/B ratio of 0.77. 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, MSI has a P/B of 141.04.
These metrics, and several others, help CMTL earn a Value grade of B, while MSI has been given a Value grade of D.
CMTL sticks out from MSI in both our Zacks Rank and Style Scores models, so value investors will likely feel that CMTL is the better option right now.
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Comtech Telecommunications Corp. (CMTL) : Free Stock Analysis Report
Motorola Solutions, Inc. (MSI) : Free Stock Analysis Report
