OSIS vs. TEL: Which Stock Is the Better Value Option?
Investors interested in stocks from the Electronics - Miscellaneous Components sector have probably already heard of OSI Systems (OSIS) and TE Connectivity (TEL). But which of these two companies is the best option for those looking for undervalued stocks? 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.
OSI Systems has a Zacks Rank of #1 (Strong Buy), while TE Connectivity has a Zacks Rank of #4 (Sell) 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. 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.
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.
OSIS currently has a forward P/E ratio of 15.36, while TEL has a forward P/E of 16.36. We also note that OSIS has a PEG ratio of 1.40. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. TEL currently has a PEG ratio of 2.32.
Another notable valuation metric for OSIS is its P/B ratio of 2.76. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, TEL has a P/B of 3.37.
These are just a few of the metrics contributing to OSIS's Value grade of B and TEL's Value grade of C.
OSIS sticks out from TEL 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
TE Connectivity Ltd. (TEL) : Free Stock Analysis Report
