YELP or RELX: Which Is the Better Value Stock Right Now?
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Investors interested in Internet - Content stocks are likely familiar with Yelp (YELP) and RELX PLC (RELX). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Yelp and RELX PLC are sporting Zacks Ranks of #1 (Strong Buy) and #2 (Buy), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that YELP is likely seeing its earnings outlook improve to a greater extent. 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.
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.
YELP currently has a forward P/E ratio of 20.42, while RELX has a forward P/E of 29.13. We also note that YELP has a PEG ratio of 0.79. 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. RELX currently has a PEG ratio of 3.29.
Another notable valuation metric for YELP is its P/B ratio of 3.09. 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, RELX has a P/B of 20.56.
These metrics, and several others, help YELP earn a Value grade of A, while RELX has been given a Value grade of F.
YELP stands above RELX thanks to its solid earnings outlook, and based on these valuation figures, we also feel that YELP is the superior value option right now.
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Yelp Inc. (YELP) : Free Stock Analysis Report
RELX PLC (RELX) : Free Stock Analysis Report