Investors looking for stocks in the Medical - Products sector might want to consider either Envista (NVST) or Abbott (ABT). 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.
Currently, Envista has a Zacks Rank of #1 (Strong Buy), while Abbott has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that NVST 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 also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
NVST currently has a forward P/E ratio of 19.35, while ABT has a forward P/E of 25.75. We also note that NVST has a PEG ratio of 1.15. 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. ABT currently has a PEG ratio of 2.51.
Another notable valuation metric for NVST is its P/B ratio of 1.15. 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, ABT has a P/B of 4.54.
Based on these metrics and many more, NVST holds a Value grade of B, while ABT has a Value grade of C.
NVST sticks out from ABT in both our Zacks Rank and Style Scores models, so value investors will likely feel that NVST is the better option right now.
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Envista Holdings Corporation (NVST): Free Stock Analysis Report Abbott Laboratories (ABT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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