OSIS vs. TEL: Which Stock Is the Better Value Option?
Investors interested in Electronics - Miscellaneous Components stocks are likely familiar with OSI Systems (OSIS) and TE Connectivity (TEL). 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.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. 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.
OSI Systems and TE Connectivity are both sporting a Zacks Rank of # 2 (Buy) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. 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 16.26, while TEL has a forward P/E of 20.89. We also note that OSIS has a PEG ratio of 1.81. 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. TEL currently has a PEG ratio of 2.01.
Another notable valuation metric for OSIS is its P/B ratio of 2.65. 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, TEL has a P/B of 4.81.
These metrics, and several others, help OSIS earn a Value grade of B, while TEL has been given a Value grade of C.
Both OSIS and TEL are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that OSIS is the superior value option right now.
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OSI Systems, Inc. (OSIS) : Free Stock Analysis Report
TE Connectivity Ltd. (TEL) : Free Stock Analysis Report
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