AMED vs. USPH: Which Stock Is the Better Value Option?
Investors interested in Medical - Outpatient and Home Healthcare stocks are likely familiar with Amedisys (AMED) and U.S. Physical Therapy (USPH). 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, Amedisys has a Zacks Rank of #2 (Buy), while U.S. Physical Therapy 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 AMED has an improving earnings outlook. But this is just one piece of the puzzle 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.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
AMED currently has a forward P/E ratio of 20.84, while USPH has a forward P/E of 35.02. We also note that AMED has a PEG ratio of 2.12. 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. USPH currently has a PEG ratio of 6.08.
Another notable valuation metric for AMED is its P/B ratio of 2.79. 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, USPH has a P/B of 3.08.
These metrics, and several others, help AMED earn a Value grade of B, while USPH has been given a Value grade of D.
AMED sticks out from USPH in both our Zacks Rank and Style Scores models, so value investors will likely feel that AMED is the better option right now.
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Amedisys, Inc. (AMED) : Free Stock Analysis Report
U.S. Physical Therapy, Inc. (USPH) : Free Stock Analysis Report
