UEIC vs. TRMB: Which Stock Is the Better Value Option?
Investors looking for stocks in the Electronics - Miscellaneous Products sector might want to consider either Universal Electronics (UEIC) or Trimble Navigation (TRMB). 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Universal Electronics has a Zacks Rank of #2 (Buy), while Trimble Navigation has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that UEIC likely has seen a stronger improvement to its earnings outlook than TRMB 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.
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.
UEIC currently has a forward P/E ratio of 11.46, while TRMB has a forward P/E of 22.49. We also note that UEIC has a PEG ratio of 0.76. 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. TRMB currently has a PEG ratio of 3.
Another notable valuation metric for UEIC is its P/B ratio of 2.39. 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, TRMB has a P/B of 3.68.
These are just a few of the metrics contributing to UEIC's Value grade of B and TRMB's Value grade of D.
UEIC sticks out from TRMB in both our Zacks Rank and Style Scores models, so value investors will likely feel that UEIC is the better option right now.
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