TGNA vs. NFLX: Which Stock Is the Better Value Option?
Investors interested in stocks from the Broadcast Radio and Television sector have probably already heard of TEGNA Inc. (TGNA) and Netflix (NFLX). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, TEGNA Inc. has a Zacks Rank of #2 (Buy), while Netflix has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that TGNA is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
TGNA currently has a forward P/E ratio of 8.55, while NFLX has a forward P/E of 56.08. We also note that TGNA has a PEG ratio of 0.86. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. NFLX currently has a PEG ratio of 1.83.
Another notable valuation metric for TGNA is its P/B ratio of 1.70. 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, NFLX has a P/B of 17.42.
These metrics, and several others, help TGNA earn a Value grade of A, while NFLX has been given a Value grade of D.
TGNA is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that TGNA is likely the superior value option right now.
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TEGNA Inc. (TGNA) : Free Stock Analysis Report
Netflix, Inc. (NFLX) : Free Stock Analysis Report
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