LFUS or TEL: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Electronics - Miscellaneous Components sector might want to consider either Littelfuse (LFUS) or TE Connectivity (TEL). But which of these two stocks presents investors with the better value opportunity right now? Let's 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Littelfuse and TE Connectivity are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that LFUS has an improving earnings outlook. But this is just one piece of the puzzle 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.
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.
LFUS currently has a forward P/E ratio of 20, while TEL has a forward P/E of 20.33. We also note that LFUS has a PEG ratio of 1.67. 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. TEL currently has a PEG ratio of 2.94.
Another notable valuation metric for LFUS is its P/B ratio of 2.92. 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, TEL has a P/B of 3.82.
These metrics, and several others, help LFUS earn a Value grade of B, while TEL has been given a Value grade of C.
LFUS stands above TEL thanks to its solid earnings outlook, and based on these valuation figures, we also feel that LFUS is the superior value option right now.
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Littelfuse, Inc. (LFUS) : Free Stock Analysis Report
TE Connectivity Ltd. (TEL) : Free Stock Analysis Report
