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TGNA vs. GAIA: Which Stock Should Value Investors Buy Now?

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·2 min read
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  • TGNA
  • GAIA

Investors interested in Broadcast Radio and Television stocks are likely familiar with TEGNA Inc. (TGNA) and Gaiam (GAIA). But which of these two stocks presents investors with the better value opportunity right now? 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 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.

TEGNA Inc. and Gaiam are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. Investors should feel comfortable knowing that TGNA likely has seen a stronger improvement to its earnings outlook than GAIA has recently. 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.

TGNA currently has a forward P/E ratio of 9.26, while GAIA has a forward P/E of 114. We also note that TGNA has a PEG ratio of 0.93. 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. GAIA currently has a PEG ratio of 7.60.

Another notable valuation metric for TGNA is its P/B ratio of 2.05. 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, GAIA has a P/B of 3.20.

These metrics, and several others, help TGNA earn a Value grade of A, while GAIA has been given a Value grade of C.

TGNA stands above GAIA thanks to its solid earnings outlook, and based on these valuation figures, we also feel that TGNA is the superior value option right now.


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