ON or MPWR: Which Is the Better Value Stock Right Now?
ON vs. MPWR: Which Stock Is the Better Value Option?
Investors with an interest in Semiconductor - Analog and Mixed stocks have likely encountered both ON Semiconductor Corp. (ON) and Monolithic Power (MPWR). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Right now, both ON Semiconductor Corp. and Monolithic Power are sporting a Zacks Rank of # 2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is just one piece of the puzzle for value investors.
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.
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.
ON currently has a forward P/E ratio of 21.89, while MPWR has a forward P/E of 74.57. We also note that ON has a PEG ratio of 0.41. 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. MPWR currently has a PEG ratio of 2.98.
Another notable valuation metric for ON is its P/B ratio of 5.94. 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, MPWR has a P/B of 21.17.
These are just a few of the metrics contributing to ON's Value grade of B and MPWR's Value grade of F.
Both ON and MPWR are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that ON is the superior value option right now.
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ON Semiconductor Corporation (ON): Free Stock Analysis Report
Monolithic Power Systems, Inc. (MPWR): Free Stock Analysis Report
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