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PENN or LVS: Which Is the Better Value Stock Right Now?

Zacks Equity Research

Investors looking for stocks in the Gaming sector might want to consider either Penn National Gaming (PENN) or Las Vegas Sands (LVS). But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Right now, Penn National Gaming is sporting a Zacks Rank of #1 (Strong Buy), while Las Vegas Sands has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that PENN has an improving earnings outlook. However, value investors will care about much more than just this.

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.

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.

PENN currently has a forward P/E ratio of 11.70, while LVS has a forward P/E of 17.18. We also note that PENN has a PEG ratio of 1.17. 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. LVS currently has a PEG ratio of 7.16.

Another notable valuation metric for PENN is its P/B ratio of 1.14. 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, LVS has a P/B of 6.36.

Based on these metrics and many more, PENN holds a Value grade of A, while LVS has a Value grade of C.

PENN has seen stronger estimate revision activity and sports more attractive valuation metrics than LVS, so it seems like value investors will conclude that PENN is the superior option right now.


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Penn National Gaming, Inc. (PENN) : Free Stock Analysis Report
 
Las Vegas Sands Corp. (LVS) : Free Stock Analysis Report
 
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