INTC or NVDA: Which Is the Better Value Stock Right Now?
Investors interested in Semiconductor - General stocks are likely familiar with Intel (INTC) and 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.
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, Intel is sporting a Zacks Rank of #1 (Strong Buy), while Nvidia has a Zacks Rank of #4 (Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that INTC is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture for value investors.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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 10.54, while NVDA has a forward P/E of 20.30. We also note that INTC has a PEG ratio of 1.25. 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. NVDA currently has a PEG ratio of 1.90.
Another notable valuation metric for INTC is its P/B ratio of 3.12. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, NVDA has a P/B of 9.46.
Based on these metrics and many more, INTC holds a Value grade of B, while NVDA has a Value grade of F.
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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