Investors with an interest in Medical - Drugs stocks have likely encountered both USANA Health Sciences (USNA) and Stevanato Group (STVN). But which of these two companies is the best option for those looking for undervalued stocks? 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with 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 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 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.
USNA currently has a forward P/E ratio of 12.26, while STVN has a forward P/E of 39.16. We also note that USNA has a PEG ratio of 1.02. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. STVN currently has a PEG ratio of 2.23.
Another notable valuation metric for USNA is its P/B ratio of 1.13. 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, STVN has a P/B of 4.27.
These are just a few of the metrics contributing to USNA's Value grade of A and STVN's 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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