HSIC or CNMD: Which Is the Better Value Stock Right Now?
Investors with an interest in Medical - Dental Supplies stocks have likely encountered both Henry Schein (HSIC) and Conmed (CNMD). But which of these two stocks presents investors with the better value opportunity right now? 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Right now, Henry Schein is sporting a Zacks Rank of #2 (Buy), while Conmed has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that HSIC has an improving earnings outlook. 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.
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.
HSIC currently has a forward P/E ratio of 16.73, while CNMD has a forward P/E of 37.47. We also note that HSIC has a PEG ratio of 1.42. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. CNMD currently has a PEG ratio of 3.02.
Another notable valuation metric for HSIC is its P/B ratio of 2.63. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, CNMD has a P/B of 5.38.
These metrics, and several others, help HSIC earn a Value grade of A, while CNMD has been given a Value grade of C.
HSIC 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 HSIC is likely the superior value option right now.
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Henry Schein, Inc. (HSIC) : Free Stock Analysis Report
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