Investors looking for stocks in the Medical - Dental Supplies sector might want to consider either Henry Schein (HSIC) or The Cooper Companies (COO). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 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.
Currently, Henry Schein has a Zacks Rank of #2 (Buy), while The Cooper Companies has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that HSIC is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.
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 Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
HSIC currently has a forward P/E ratio of 18.60, while COO has a forward P/E of 30.22. We also note that HSIC has a PEG ratio of 1.65. 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. COO currently has a PEG ratio of 3.02.
Another notable valuation metric for HSIC is its P/B ratio of 2.67. 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, COO has a P/B of 3.21.
Based on these metrics and many more, HSIC holds a Value grade of A, while COO has 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.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Henry Schein, Inc. (HSIC) : Free Stock Analysis Report
The Cooper Companies, Inc. (COO) : Free Stock Analysis Report
To read this article on Zacks.com click here.