Investors looking for stocks in the Medical - Drugs sector might want to consider either USANA Health Sciences (USNA) or Stevanato Group (STVN). But which of these two stocks presents investors with the better value opportunity right now? 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.
USANA Health Sciences and Stevanato Group are both sporting a Zacks Rank of #2 (Buy) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is just one piece of the puzzle for value investors.
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.
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.
USNA currently has a forward P/E ratio of 11.19, while STVN has a forward P/E of 38.20. We also note that USNA has a PEG ratio of 0.93. 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. STVN currently has a PEG ratio of 2.17.
Another notable valuation metric for USNA is its P/B ratio of 1.03. 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, STVN has a P/B of 4.17.
Based on these metrics and many more, USNA holds a Value grade of A, while STVN has a Value grade of C.
Both USNA and STVN are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that USNA is the superior value option right now.
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USANA Health Sciences, Inc. (USNA): Free Stock Analysis Report Stevanato Group S.p.A. (STVN): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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