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UMC vs. LSCC: Which Stock Is the Better Value Option?

UMC vs. LSCC: Which Stock Is the Better Value Option?

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This story originally appeared on Zacks

Investors looking for stocks in the Electronics - Semiconductors sector might want to consider either United Microelectronics Corporation (UMC) or Lattice Semiconductor (LSCC). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

- Zacks

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.

Both United Microelectronics Corporation and Lattice Semiconductor have a Zacks Rank of # 2 (Buy) right now. This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. 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.

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.

UMC currently has a forward P/E ratio of 13.74, while LSCC has a forward P/E of 73.86. We also note that UMC has a PEG ratio of 0.49. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. LSCC currently has a PEG ratio of 7.39.

Another notable valuation metric for UMC is its P/B ratio of 2.98. 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, LSCC has a P/B of 26.26.

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

Both UMC and LSCC are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that UMC is the superior value option right now.



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United Microelectronics Corporation (UMC): Free Stock Analysis Report

 

Lattice Semiconductor Corporation (LSCC): Free Stock Analysis Report

 

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