Investors interested in stocks from the Medical - Dental Supplies sector have probably already heard of Merit Medical (MMSI) and Straumann Holding AG (SAUHY). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 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.
Right now, Merit Medical is sporting a Zacks Rank of #2 (Buy), while Straumann Holding AG has a Zacks Rank of #4 (Sell). Investors should feel comfortable knowing that MMSI likely has seen a stronger improvement to its earnings outlook than SAUHY has recently. However, value investors will care about much more than just this.
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.
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.
MMSI currently has a forward P/E ratio of 22.61, while SAUHY has a forward P/E of 28.18. We also note that MMSI has a PEG ratio of 2.32. 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. SAUHY currently has a PEG ratio of 2.61.
Another notable valuation metric for MMSI is its P/B ratio of 3.27. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, SAUHY has a P/B of 6.92.
Based on these metrics and many more, MMSI holds a Value grade of B, while SAUHY has a Value grade of D.
MMSI has seen stronger estimate revision activity and sports more attractive valuation metrics than SAUHY, so it seems like value investors will conclude that MMSI is the superior option right now.
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Merit Medical Systems, Inc. (MMSI): Free Stock Analysis Report Straumann Holding AG (SAUHY): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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