NVST or ESLOY: Which Is the Better Value Stock Right Now?

Investors with an interest in Medical - Products stocks have likely encountered both Envista (NVST) and EssilorLuxottica Unsponsored ADR (ESLOY). 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, Envista has a Zacks Rank of #1 (Strong Buy), while EssilorLuxottica Unsponsored ADR has a Zacks Rank of #4 (Sell). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that NVST has an improving earnings outlook. But this is only part of the picture for value investors.

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 highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

NVST currently has a forward P/E ratio of 20.01, while ESLOY has a forward P/E of 31.31. We also note that NVST has a PEG ratio of 1.92. 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. ESLOY currently has a PEG ratio of 3.23.

Another notable valuation metric for NVST is its P/B ratio of 1.49. 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, ESLOY has a P/B of 3.05.

These metrics, and several others, help NVST earn a Value grade of B, while ESLOY has been given a Value grade of D.

NVST is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that NVST is likely the superior value option right now.

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This article originally published on Zacks Investment Research (zacks.com).

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