Investors with an interest in Medical - Dental Supplies stocks have likely encountered both The Cooper Companies (COO) and 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.
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.
Right now, both The Cooper Companies and West Pharmaceutical Services are sporting a Zacks Rank of #2 (Buy). Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. 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.
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.
COO currently has a forward P/E ratio of 17.91, while WST has a forward P/E of 31.34. We also note that COO has a PEG ratio of 2.30. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. WST currently has a PEG ratio of 3.31.
Another notable valuation metric for COO is its P/B ratio of 1.95. 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, WST has a P/B of 5.67.
Based on these metrics and many more, COO holds a Value grade of B, while WST has a Value grade of C.
Both COO and WST are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that COO is the superior value 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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