CPSI vs. OMCL: Which Stock Is the Better Value Option?
Investors with an interest in Medical Info Systems stocks have likely encountered both Computer Programs and Systems (CPSI) and Omnicell (OMCL). But which of these two companies is the best option for those looking for undervalued stocks? Let's 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.
Both Computer Programs and Systems and Omnicell have a Zacks Rank of # 2 (Buy) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. However, value investors will care about much more than just this.
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.
CPSI currently has a forward P/E ratio of 13.32, while OMCL has a forward P/E of 41.42. We also note that CPSI has a PEG ratio of 0.93. 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. OMCL currently has a PEG ratio of 2.59.
Another notable valuation metric for CPSI is its P/B ratio of 2.50. 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 6.34.
These are just a few of the metrics contributing to CPSI's Value grade of A and OMCL's Value grade of D.
Both CPSI and OMCL are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that CPSI is the superior value option right now.
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Computer Programs and Systems, Inc. (CPSI) : Free Stock Analysis Report
Omnicell, Inc. (OMCL) : Free Stock Analysis Report
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