Investors interested in Medical Services stocks are likely familiar with Organon (OGN) and Medpace (MEDP). 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.
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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Organon has a Zacks Rank of #2 (Buy), while Medpace has a Zacks Rank of #3 (Hold) right now. This means that OGN's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture for value investors.
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 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.
OGN currently has a forward P/E ratio of 2.65, while MEDP has a forward P/E of 25.65. We also note that OGN has a PEG ratio of 1.01. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. MEDP currently has a PEG ratio of 5.88.
Another notable valuation metric for OGN is its P/B ratio of 4.87. 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, MEDP has a P/B of 15.79.
These are just a few of the metrics contributing to OGN's Value grade of A and MEDP's Value grade of C.
OGN sticks out from MEDP in both our Zacks Rank and Style Scores models, so value investors will likely feel that OGN is the better option right now.
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Organon & Co. (OGN): Free Stock Analysis Report Medpace Holdings, Inc. (MEDP): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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