NVT vs. OLED: Which Stock Is the Better Value Option?
Investors with an interest in Electronics - Miscellaneous Components stocks have likely encountered both nVent Electric (NVT) and Universal Display Corp. (OLED). 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.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. 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, nVent Electric has a Zacks Rank of #2 (Buy), while Universal Display Corp. has a Zacks Rank of #4 (Sell). This means that NVT's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. 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.
NVT currently has a forward P/E ratio of 12.94, while OLED has a forward P/E of 84.77. We also note that NVT has a PEG ratio of 2.70. 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. OLED currently has a PEG ratio of 2.83.
Another notable valuation metric for NVT is its P/B ratio of 1.14. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, OLED has a P/B of 9.67.
These metrics, and several others, help NVT earn a Value grade of B, while OLED has been given a Value grade of D.
NVT 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 NVT is likely the superior value option right now.
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nVent Electric PLC (NVT) : Free Stock Analysis Report
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