Investors interested in stocks from the Medical - Outpatient and Home Healthcare sector have probably already heard of Astrana Health, Inc. (ASTH) and U.S. Physical Therapy (USPH). 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.
Currently, Astrana Health, Inc. has a Zacks Rank of #1 (Strong Buy), while U.S. Physical Therapy has a Zacks Rank of #2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that ASTH is likely seeing its earnings outlook improve to a greater extent. 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.
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.
ASTH currently has a forward P/E ratio of 20.02, while USPH has a forward P/E of 33.65. We also note that ASTH has a PEG ratio of 0.67. 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. USPH currently has a PEG ratio of 4.40.
Another notable valuation metric for ASTH is its P/B ratio of 2.11. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, USPH has a P/B of 2.65.
These are just a few of the metrics contributing to ASTH's Value grade of A and USPH's Value grade of C.
ASTH 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 ASTH is likely the superior value option right now.
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Astrana Health, Inc. (ASTH): Free Stock Analysis Report U.S. Physical Therapy, Inc. (USPH): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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