CHNG vs. OMCL: Which Stock Is the Better Value Option?
Investors looking for stocks in the Medical Info Systems sector might want to consider either Change Healthcare (CHNG) or Omnicell (OMCL). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. 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.
Change Healthcare has a Zacks Rank of #2 (Buy), while Omnicell has a Zacks Rank of #5 (Strong Sell) right now. Investors should feel comfortable knowing that CHNG likely has seen a stronger improvement to its earnings outlook than OMCL has recently. But this is just one piece of the puzzle for value investors.
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.
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.
CHNG currently has a forward P/E ratio of 13.54, while OMCL has a forward P/E of 32.07. We also note that CHNG has a PEG ratio of 1.69. 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. OMCL currently has a PEG ratio of 2.
Another notable valuation metric for CHNG is its P/B ratio of 2.03. 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, OMCL has a P/B of 4.84.
These are just a few of the metrics contributing to CHNG's Value grade of B and OMCL's Value grade of D.
CHNG sticks out from OMCL in both our Zacks Rank and Style Scores models, so value investors will likely feel that CHNG is the better option right now.
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Change Healthcare Inc. (CHNG) : Free Stock Analysis Report
Omnicell, Inc. (OMCL) : Free Stock Analysis Report
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