INTC vs. TXN: Which Stock Should Value Investors Buy Now?

Investors with an interest in Semiconductor - General stocks have likely encountered both Intel (INTC) and Texas Instruments (TXN). 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Currently, Intel has a Zacks Rank of #1 (Strong Buy), while Texas Instruments has a Zacks Rank of #5 (Strong Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that INTC 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 grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

INTC currently has a forward P/E ratio of 12.38, while TXN has a forward P/E of 23.38. We also note that INTC has a PEG ratio of 1.65. 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. TXN currently has a PEG ratio of 2.31.

Another notable valuation metric for INTC is its P/B ratio of 3.34. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, TXN has a P/B of 12.52.

Based on these metrics and many more, INTC holds a Value grade of B, while TXN has a Value grade of F.

INTC stands above TXN thanks to its solid earnings outlook, and based on these valuation figures, we also feel that INTC is the superior value option right now.

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Texas Instruments Incorporated (TXN) : Free Stock Analysis Report
 
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