Investors interested in stocks from the Broadcast Radio and Television sector have probably already heard of TEGNA Inc. (TGNA) and Roku (ROKU). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great 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. has a Zacks Rank of #2 (Buy), while Roku has a Zacks Rank of #3 (Hold) right now. 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 analyze a variety of traditional, tried-and-true metrics to help find companies 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.
TGNA currently has a forward P/E ratio of 10.08, while ROKU has a forward P/E of 179.34. We also note that TGNA has a PEG ratio of 1.01. 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. ROKU currently has a PEG ratio of 3.66.
Another notable valuation metric for TGNA is its P/B ratio of 1.95. 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, ROKU has a P/B of 13.91.
These are just a few of the metrics contributing to TGNA's Value grade of A and ROKU's Value grade of D.
TGNA has seen stronger estimate revision activity and sports more attractive valuation metrics than ROKU, so it seems like value investors will conclude that TGNA is the superior option right now.
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TEGNA Inc. (TGNA) : Free Stock Analysis Report
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