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INTC or NVDA: Which Is the Better Value Stock Right Now?

Zacks Equity Research
BancorpSouth (BXS) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.

Investors looking for stocks in the Semiconductor - General sector might want to consider either Intel (INTC) or Nvidia (NVDA). 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.

Right now, Intel is sporting a Zacks Rank of #1 (Strong Buy), while Nvidia has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that INTC has an improving earnings outlook. 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 Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

INTC currently has a forward P/E ratio of 10.40, while NVDA has a forward P/E of 24.97. We also note that INTC has a PEG ratio of 1.24. 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. NVDA currently has a PEG ratio of 2.34.

Another notable valuation metric for INTC is its P/B ratio of 3.08. 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, NVDA has a P/B of 13.63.

These are just a few of the metrics contributing to INTC's Value grade of B and NVDA's Value grade of D.

INTC stands above NVDA thanks to its solid earnings outlook, and based on these valuation figures, we also feel that INTC is the superior value option right now.


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