Advertisement
Australia markets closed
  • ALL ORDS

    8,153.70
    +80.10 (+0.99%)
     
  • ASX 200

    7,896.90
    +77.30 (+0.99%)
     
  • AUD/USD

    0.6526
    +0.0008 (+0.12%)
     
  • OIL

    83.11
    -0.06 (-0.07%)
     
  • GOLD

    2,254.80
    +16.40 (+0.73%)
     
  • Bitcoin AUD

    107,620.36
    -886.28 (-0.82%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • AUD/EUR

    0.6038
    +0.0004 (+0.07%)
     
  • AUD/NZD

    1.0906
    +0.0003 (+0.03%)
     
  • NZX 50

    12,105.29
    +94.63 (+0.79%)
     
  • NASDAQ

    18,254.69
    -26.15 (-0.14%)
     
  • FTSE

    7,952.62
    +20.64 (+0.26%)
     
  • Dow Jones

    39,807.37
    +47.29 (+0.12%)
     
  • DAX

    18,492.49
    +15.40 (+0.08%)
     
  • Hang Seng

    16,541.42
    +148.58 (+0.91%)
     
  • NIKKEI 225

    40,369.44
    +201.37 (+0.50%)
     

NXPI vs. MPWR: Which Stock Is the Better Value Option?

Investors with an interest in Semiconductor - Analog and Mixed stocks have likely encountered both NXP Semiconductors (NXPI) and Monolithic Power (MPWR). But which of these two stocks presents investors with the better value opportunity right now? 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Currently, NXP Semiconductors has a Zacks Rank of #2 (Buy), while Monolithic Power has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that NXPI has an improving earnings outlook. But this is just one factor that value investors are interested in.

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.

ADVERTISEMENT

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

NXPI currently has a forward P/E ratio of 12.71, while MPWR has a forward P/E of 31.54. We also note that NXPI has a PEG ratio of 0.58. 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. MPWR currently has a PEG ratio of 1.26.

Another notable valuation metric for NXPI is its P/B ratio of 5.49. 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, MPWR has a P/B of 11.15.

Based on these metrics and many more, NXPI holds a Value grade of B, while MPWR has a Value grade of D.

NXPI sticks out from MPWR in both our Zacks Rank and Style Scores models, so value investors will likely feel that NXPI is the better option right now.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

NXP Semiconductors N.V. (NXPI) : Free Stock Analysis Report

Monolithic Power Systems, Inc. (MPWR) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research