Investors interested in Medical - Dental Supplies stocks are likely familiar with Henry Schein (HSIC) and Straumann Holding AG (SAUHY). 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.
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.
Right now, Henry Schein is sporting a Zacks Rank of #2 (Buy), while Straumann Holding AG has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that HSIC likely has seen a stronger improvement to its earnings outlook than SAUHY has recently. But this is only part of the picture for value investors.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.
HSIC currently has a forward P/E ratio of 16.34, while SAUHY has a forward P/E of 28.21. We also note that HSIC has a PEG ratio of 1.55. 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. SAUHY currently has a PEG ratio of 2.03.
Another notable valuation metric for HSIC is its P/B ratio of 2.56. 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, SAUHY has a P/B of 7.12.
These are just a few of the metrics contributing to HSIC's Value grade of A and SAUHY's Value grade of D.
HSIC is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that HSIC is likely the superior value option right now.
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Henry Schein, Inc. (HSIC): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).