ADUS or USPH: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Medical - Outpatient and Home Healthcare sector might want to consider either Addus HomeCare (ADUS) or U.S. Physical Therapy (USPH). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
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, Addus HomeCare is sporting a Zacks Rank of #2 (Buy), while U.S. Physical Therapy has a Zacks Rank of #4 (Sell). This means that ADUS'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 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.
ADUS currently has a forward P/E ratio of 27.52, while USPH has a forward P/E of 39.71. We also note that ADUS has a PEG ratio of 2.36. 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. USPH currently has a PEG ratio of 3.97.
Another notable valuation metric for ADUS is its P/B ratio of 2.84. 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, USPH has a P/B of 4.27.
These metrics, and several others, help ADUS earn a Value grade of B, while USPH has been given a Value grade of C.
ADUS sticks out from USPH in both our Zacks Rank and Style Scores models, so value investors will likely feel that ADUS is the better option right now.
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Addus HomeCare Corporation (ADUS) : Free Stock Analysis Report
U.S. Physical Therapy, Inc. (USPH) : Free Stock Analysis Report
