ELV vs. HQY: Which Stock Should Value Investors Buy Now?
Investors looking for stocks in the Medical Services sector might want to consider either Elevance Health (ELV) or HealthEquity (HQY). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Both Elevance Health and HealthEquity 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. But this is just one factor that value investors are interested in.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
ELV currently has a forward P/E ratio of 13.83, while HQY has a forward P/E of 37.13. We also note that ELV has a PEG ratio of 1.14. 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. HQY currently has a PEG ratio of 1.58.
Another notable valuation metric for ELV is its P/B ratio of 2.80. 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, HQY has a P/B of 3.26.
These are just a few of the metrics contributing to ELV's Value grade of A and HQY's Value grade of D.
Both ELV and HQY are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that ELV is the superior value option right now.
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Elevance Health, Inc. (ELV) : Free Stock Analysis Report
HealthEquity, Inc. (HQY) : Free Stock Analysis Report
