ELV vs. RVTY: Which Stock Is the Better Value Option?

Investors looking for stocks in the Medical Services sector might want to consider either Elevance Health (ELV) or Revvity (RVTY). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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.

Elevance Health has a Zacks Rank of #2 (Buy), while Revvity has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that ELV is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

ELV currently has a forward P/E ratio of 16.37, while RVTY has a forward P/E of 29.35. We also note that ELV has a PEG ratio of 2.32. 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. RVTY currently has a PEG ratio of 2.86.

Another notable valuation metric for ELV is its P/B ratio of 2.15. 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, RVTY has a P/B of 2.43.

Based on these metrics and many more, ELV holds a Value grade of A, while RVTY has a Value grade of C.

ELV sticks out from RVTY in both our Zacks Rank and Style Scores models, so value investors will likely feel that ELV is the better option right now.

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

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