F vs. TSLA: Which Stock Should Value Investors Buy Now?
F vs. TSLA: Which Stock Is the Better Value Option?
Investors with an interest in Automotive - Domestic stocks have likely encountered both Ford Motor Company (F) and Tesla (TSLA). 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.
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 is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Currently, Ford Motor Company has a Zacks Rank of #1 (Strong Buy), while Tesla has a Zacks Rank of #2 (Buy). This means that F's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture for value investors.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
F currently has a forward P/E ratio of 11.39, while TSLA has a forward P/E of 153.78. We also note that F has a PEG ratio of 0.46. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. TSLA currently has a PEG ratio of 4.10.
Another notable valuation metric for F is its P/B ratio of 2.37. 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, TSLA has a P/B of 43.20.
Based on these metrics and many more, F holds a Value grade of A, while TSLA has a Value grade of F.
F stands above TSLA thanks to its solid earnings outlook, and based on these valuation figures, we also feel that F is the superior value option right now.
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