Investors with an interest in Medical - Instruments stocks have likely encountered both Hologic (HOLX) and Idexx Laboratories (IDXX). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. 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.
Hologic and Idexx Laboratories 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. However, value investors will care about much more than just this.
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 grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
HOLX currently has a forward P/E ratio of 16.05, while IDXX has a forward P/E of 51.02. We also note that HOLX has a PEG ratio of 2.47. 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. IDXX currently has a PEG ratio of 4.17.
Another notable valuation metric for HOLX is its P/B ratio of 3.3. 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, IDXX has a P/B of 35.29.
Based on these metrics and many more, HOLX holds a Value grade of B, while IDXX has a Value grade of D.
Both HOLX and IDXX are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that HOLX is the superior value option right now.
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Hologic, Inc. (HOLX): Free Stock Analysis Report IDEXX Laboratories, Inc. (IDXX): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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