BLCO or AVTR: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Medical Services sector might want to consider either Bausch + Lomb (BLCO) or Avantor, Inc. (AVTR). But which of these two stocks presents investors with the better value opportunity right now? 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.
Bausch + Lomb and Avantor, Inc. are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that BLCO is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.
BLCO currently has a forward P/E ratio of 24.93, while AVTR has a forward P/E of 25.41. We also note that BLCO has a PEG ratio of 1.56. 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. AVTR currently has a PEG ratio of 1.62.
Another notable valuation metric for BLCO is its P/B ratio of 0.82. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, AVTR has a P/B of 3.32.
Based on these metrics and many more, BLCO holds a Value grade of B, while AVTR has a Value grade of C.
BLCO has seen stronger estimate revision activity and sports more attractive valuation metrics than AVTR, so it seems like value investors will conclude that BLCO is the superior option right now.
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Bausch + Lomb Corporation (BLCO) : Free Stock Analysis Report
Avantor, Inc. (AVTR) : Free Stock Analysis Report
