One is a global video entertainment giant, with reach unlike any other visual distribution platform that’s perhaps ever existed. The other is the owner of broadcast TV stations including the NBC affiliate in Phoenix and the CBS affiliates in Tampa and Washington, DC.
Which one should investors consider? Zacks Equity Research has an answer.
Currently, TEGNA Inc. has a Zacks Rank of #2 (Buy), while Netflix has a Zacks Rank of #3 (Hold).
As Zacks explains, its system places an emphasis on companies that have seen positive earnings estimate revisions. As such, “investors should feel comfortable knowing that TGNA is likely seeing its earnings outlook improve to a greater extent,” it says.
That said, value investors will care about much more than just this.
As such, other factors were weighed by Zacks. TEGNA currently has a forward P/E ratio of 8.55, while Netflix has a forward P/E of 56.08. Also, TGNA has a PEG ratio of 0.86. 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.
Netflix shares currently have a PEG ratio of 1.83.
Another notable valuation metric for TGNA is its P/B ratio of 1.70. 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, NFLX has a P/B of 17.42.
This is all excellent news for the value investor, Zacks concludes.
“These metrics, and several others, help TGNA earn a Value grade of A, while NFLX has been given a Value grade of D,” it says.
TEGNA shares finished Monday’s trading at $19.27; TGNA has a 1-year target price of $22.75. The company went ex-dividend on Dec. 9.