Yahoo Finance LGF.A or WMG: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Film and Television Production and Distribution sector might want to consider either Lions Gate Entertainment (LGF.A) or Warner Music Group Corp. (WMG). But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Lions Gate Entertainment and Warner Music Group Corp. are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that LGF.A is likely seeing its earnings outlook improve to a greater extent. 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.
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.
LGF.A currently has a forward P/E ratio of 23.96, while WMG has a forward P/E of 36.02. We also note that LGF.A has a PEG ratio of 1.60. 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. WMG currently has a PEG ratio of 3.96.
Another notable valuation metric for LGF.A is its P/B ratio of 2.80. 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, WMG has a P/B of 61.27.
These are just a few of the metrics contributing to LGF.A's Value grade of B and WMG's Value grade of C.
LGF.A sticks out from WMG in both our Zacks Rank and Style Scores models, so value investors will likely feel that LGF.A is the better option right now.
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Lions Gate Entertainment Corp. (LGF.A) : Free Stock Analysis Report
Warner Music Group Corp. (WMG) : Free Stock Analysis Report
