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OSIS vs. OLED: Which Stock Is the Better Value Option?

Zacks Equity Research

Investors interested in stocks from the Electronics - Miscellaneous Components sector have probably already heard of OSI Systems (OSIS) and Universal Display Corp. (OLED). 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.

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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

OSI Systems has a Zacks Rank of #1 (Strong Buy), while Universal Display Corp. has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that OSIS is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.

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.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

OSIS currently has a forward P/E ratio of 25.19, while OLED has a forward P/E of 77.80. We also note that OSIS has a PEG ratio of 2.02. 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. OLED currently has a PEG ratio of 2.59.

Another notable valuation metric for OSIS is its P/B ratio of 3.99. 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, OLED has a P/B of 12.52.

These are just a few of the metrics contributing to OSIS's Value grade of B and OLED's Value grade of F.

OSIS sticks out from OLED in both our Zacks Rank and Style Scores models, so value investors will likely feel that OSIS is the better option right now.


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OSI Systems, Inc. (OSIS) : Free Stock Analysis Report
 
Universal Display Corporation (OLED) : Free Stock Analysis Report
 
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