HSIC vs. CNMD: Which Stock Should Value Investors Buy Now?
Investors interested in Medical - Dental Supplies stocks are likely familiar with Henry Schein (HSIC) and Conmed (CNMD). 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Henry Schein and Conmed are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. 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. But this is just one factor that value investors are interested in.
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.
HSIC currently has a forward P/E ratio of 18.13, while CNMD has a forward P/E of 38.68. We also note that HSIC has a PEG ratio of 1.53. 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 3.09.
Another notable valuation metric for HSIC is its P/B ratio of 3.01. 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, CNMD has a P/B of 5.33.
These are just a few of the metrics contributing to HSIC's Value grade of A and CNMD's 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
CONMED Corporation (CNMD) : Free Stock Analysis Report
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