ELV vs. AVTR: Which Stock Is the Better Value Option?
Investors looking for stocks in the Medical Services sector might want to consider either Elevance Health (ELV) or Avantor, Inc. (AVTR). 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, Elevance Health has a Zacks Rank of #2 (Buy), while Avantor, Inc. has a Zacks Rank of #5 (Strong Sell). Investors should feel comfortable knowing that ELV likely has seen a stronger improvement to its earnings outlook than AVTR has recently. However, value investors will care about much more than just this.
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.
ELV currently has a forward P/E ratio of 13.36, while AVTR has a forward P/E of 22.29. We also note that ELV has a PEG ratio of 1.11. 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. AVTR currently has a PEG ratio of 1.42.
Another notable valuation metric for ELV is its P/B ratio of 2.95. 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, AVTR has a P/B of 3.13.
These metrics, and several others, help ELV earn a Value grade of A, while AVTR has been given a Value grade of C.
ELV is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that ELV is likely the superior value option right now.
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Elevance Health, Inc. (ELV) : Free Stock Analysis Report
Avantor, Inc. (AVTR) : Free Stock Analysis Report
