ALC vs. IDXX: Which Stock Is the Better Value Option?
Investors interested in stocks from the Medical - Instruments sector have probably already heard of Alcon (ALC) and Idexx Laboratories (IDXX). 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.
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 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.
Currently, both Alcon and Idexx Laboratories are holding 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. But this is just one piece of the puzzle for value investors.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.
ALC currently has a forward P/E ratio of 26.99, while IDXX has a forward P/E of 49.98. We also note that ALC has a PEG ratio of 1.91. 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. IDXX currently has a PEG ratio of 2.78.
Another notable valuation metric for ALC is its P/B ratio of 1.74. 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, IDXX has a P/B of 65.05.
These are just a few of the metrics contributing to ALC's Value grade of B and IDXX's Value grade of C.
Both ALC and IDXX are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that ALC is the superior value option right now.
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Alcon (ALC) : Free Stock Analysis Report
IDEXX Laboratories, Inc. (IDXX) : Free Stock Analysis Report
