Investors interested in Medical - Products stocks are likely familiar with Envista (NVST) and Stryker (SYK). 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, Envista is sporting a Zacks Rank of #2 (Buy), while Stryker has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that NVST is likely seeing its earnings outlook improve to a greater extent. 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.
NVST currently has a forward P/E ratio of 19.27, while SYK has a forward P/E of 23.99. We also note that NVST has a PEG ratio of 1.08. 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. SYK currently has a PEG ratio of 2.30.
Another notable valuation metric for NVST is its P/B ratio of 1.29. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, SYK has a P/B of 6.31.
These are just a few of the metrics contributing to NVST's Value grade of B and SYK's Value grade of C.
NVST stands above SYK thanks to its solid earnings outlook, and based on these valuation figures, we also feel that NVST is the superior value 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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