Investors looking for stocks in the Medical - Dental Supplies sector might want to consider either The Cooper Companies (COO) or West Pharmaceutical Services (WST). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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.
Right now, The Cooper Companies is sporting a Zacks Rank of #2 (Buy), while West Pharmaceutical Services has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that COO likely has seen a stronger improvement to its earnings outlook than WST has recently. However, value investors will care about much more than just this.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when 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.
COO currently has a forward P/E ratio of 18.52, while WST has a forward P/E of 35.98. We also note that COO has a PEG ratio of 2.38. 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. WST currently has a PEG ratio of 3.80.
Another notable valuation metric for COO is its P/B ratio of 2.01. 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, WST has a P/B of 6.5.
Based on these metrics and many more, COO holds a Value grade of B, while WST has a Value grade of D.
COO sticks out from WST in both our Zacks Rank and Style Scores models, so value investors will likely feel that COO is the better option right now.
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The Cooper Companies, Inc. (COO): Free Stock Analysis Report West Pharmaceutical Services, Inc. (WST): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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