Investors looking for stocks in the Medical - Products sector might want to consider either Envista (NVST) or Stryker (SYK). 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.
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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Envista has a Zacks Rank of #2 (Buy), while Stryker has a Zacks Rank of #3 (Hold) right now. This means that NVST's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies 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 19.16, while SYK has a forward P/E of 26.00. We also note that NVST has a PEG ratio of 1.07. 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. SYK currently has a PEG ratio of 2.50.
Another notable valuation metric for NVST is its P/B ratio of 1.16. 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, SYK has a P/B of 6.19.
Based on these metrics and many more, NVST holds a Value grade of B, while SYK has a Value grade of C.
NVST sticks out from SYK 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 Stryker Corporation (SYK): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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