AMKR vs. NVMI: Which Stock Is the Better Value Option?

Investors interested in stocks from the Electronics - Semiconductors sector have probably already heard of Amkor Technology (AMKR) and Nova Ltd. (NVMI). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Amkor Technology and Nova Ltd. are sporting Zacks Ranks of #1 (Strong Buy) and #2 (Buy), respectively, right now. This means that AMKR's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst 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.

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.

AMKR currently has a forward P/E ratio of 18.40, while NVMI has a forward P/E of 32.93. We also note that AMKR has a PEG ratio of 0.59. 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. NVMI currently has a PEG ratio of 1.88.

Another notable valuation metric for AMKR is its P/B ratio of 2.54. 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, NVMI has a P/B of 7.57.

These metrics, and several others, help AMKR earn a Value grade of A, while NVMI has been given a Value grade of F.

AMKR has seen stronger estimate revision activity and sports more attractive valuation metrics than NVMI, so it seems like value investors will conclude that AMKR is the superior option right now.

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This article originally published on Zacks Investment Research (zacks.com).

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