Investors interested in Medical - Instruments stocks are likely familiar with Integer (ITGR) and Penumbra (PEN). 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, Integer is sporting a Zacks Rank of #2 (Buy), while Penumbra has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that ITGR likely has seen a stronger improvement to its earnings outlook than PEN 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.
ITGR currently has a forward P/E ratio of 16.55, while PEN has a forward P/E of 69.27. We also note that ITGR has a PEG ratio of 0.83. 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. PEN currently has a PEG ratio of 2.30.
Another notable valuation metric for ITGR is its P/B ratio of 2.17. 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, PEN has a P/B of 7.7.
These are just a few of the metrics contributing to ITGR's Value grade of B and PEN's Value grade of D.
ITGR stands above PEN thanks to its solid earnings outlook, and based on these valuation figures, we also feel that ITGR is the superior value option right now.
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Integer Holdings Corporation (ITGR): Free Stock Analysis Report Penumbra, Inc. (PEN): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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