Investors with an interest in Medical - Instruments stocks have likely encountered both Globus Medical (GMED) and Integer (ITGR). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great 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.
Globus Medical and Integer are sporting Zacks Ranks of #1 (Strong Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that GMED likely has seen a stronger improvement to its earnings outlook than ITGR has recently. But this is just one factor that value investors are interested in.
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.
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.
GMED currently has a forward P/E ratio of 14.88, while ITGR has a forward P/E of 20.68. We also note that GMED has a PEG ratio of 1.19. 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. ITGR currently has a PEG ratio of 2.40.
Another notable valuation metric for GMED is its P/B ratio of 2.09. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, ITGR has a P/B of 2.49.
These metrics, and several others, help GMED earn a Value grade of B, while ITGR has been given a Value grade of C.
GMED stands above ITGR thanks to its solid earnings outlook, and based on these valuation figures, we also feel that GMED is the superior value option right now.
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Globus Medical, Inc. (GMED): Free Stock Analysis Report
Integer Holdings Corporation (ITGR): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).