ADUS vs. CHE: Which Stock Is the Better Value Option?
Investors interested in stocks from the Medical - Outpatient and Home Healthcare sector have probably already heard of Addus HomeCare (ADUS) and Chemed (CHE). But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Addus HomeCare and Chemed are both sporting a Zacks Rank of # 2 (Buy) right now. This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. But this is just one factor that value investors are interested in.
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.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
ADUS currently has a forward P/E ratio of 19.03, while CHE has a forward P/E of 26.91. We also note that ADUS has a PEG ratio of 1.45. 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. CHE currently has a PEG ratio of 3.02.
Another notable valuation metric for ADUS is its P/B ratio of 2.11. 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, CHE has a P/B of 8.55.
These are just a few of the metrics contributing to ADUS's Value grade of B and CHE's Value grade of D.
Both ADUS and CHE are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that ADUS is the superior value option right now.
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Addus HomeCare Corporation (ADUS) : Free Stock Analysis Report
Chemed Corporation (CHE) : Free Stock Analysis Report
