TME vs. RELX: Which Stock Is the Better Value Option?
Investors interested in stocks from the Internet - Content sector have probably already heard of Tencent Music Entertainment Group Sponsored ADR (TME) and RELX PLC (RELX). 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.
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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Right now, both Tencent Music Entertainment Group Sponsored ADR and RELX PLC are sporting a Zacks Rank of # 2 (Buy). Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. However, value investors will care about much more than just this.
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.
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.
TME currently has a forward P/E ratio of 13.24, while RELX has a forward P/E of 24.39. We also note that TME has a PEG ratio of 0.49. 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. RELX currently has a PEG ratio of 2.27.
Another notable valuation metric for TME is its P/B ratio of 1.72. 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, RELX has a P/B of 13.68.
These metrics, and several others, help TME earn a Value grade of B, while RELX has been given a Value grade of C.
Both TME and RELX are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that TME is the superior value option right now.
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Tencent Music Entertainment Group Sponsored ADR (TME) : Free Stock Analysis Report
RELX PLC (RELX) : Free Stock Analysis Report
