NXPI vs. MPWR: Which Stock Is the Better Value Option?
Investors interested in Semiconductor - Analog and Mixed stocks are likely familiar with NXP Semiconductors (NXPI) and Monolithic Power (MPWR). 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.
Currently, NXP Semiconductors has a Zacks Rank of #2 (Buy), while Monolithic Power has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that NXPI likely has seen a stronger improvement to its earnings outlook than MPWR has recently. But this is just one piece of the puzzle 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.
NXPI currently has a forward P/E ratio of 14.36, while MPWR has a forward P/E of 38.57. We also note that NXPI has a PEG ratio of 0.87. 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. MPWR currently has a PEG ratio of 2.13.
Another notable valuation metric for NXPI is its P/B ratio of 6.25. 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, MPWR has a P/B of 11.77.
These metrics, and several others, help NXPI earn a Value grade of B, while MPWR has been given a Value grade of F.
NXPI sticks out from MPWR in both our Zacks Rank and Style Scores models, so value investors will likely feel that NXPI is the better option right now.
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NXP Semiconductors N.V. (NXPI) : Free Stock Analysis Report
Monolithic Power Systems, Inc. (MPWR) : Free Stock Analysis Report
