Investors with an interest in Media Conglomerates stocks have likely encountered both Walt Disney (DIS) and Madison Square Garden Entertainment (MSGE). But which of these two stocks presents investors with the better value opportunity right now? Let's 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, Walt Disney has a Zacks Rank of #2 (Buy), while Madison Square Garden Entertainment has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that DIS has an improving earnings outlook. But this is only part of the picture 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 highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
DIS currently has a forward P/E ratio of 19.97, while MSGE has a forward P/E of 26.80. We also note that DIS has a PEG ratio of 1.78. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. MSGE currently has a PEG ratio of 3.86.
Another notable valuation metric for DIS is its P/B ratio of 1.85. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, MSGE has a P/B of 175.
These are just a few of the metrics contributing to DIS's Value grade of B and MSGE's Value grade of C.
DIS has seen stronger estimate revision activity and sports more attractive valuation metrics than MSGE, so it seems like value investors will conclude that DIS is the superior option right now.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The Walt Disney Company (DIS) : Free Stock Analysis Report
Madison Square Garden Entertainment Corp. (MSGE) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.