HSIC vs. MMSI: Which Stock Is the Better Value Option?
Investors interested in Medical - Dental Supplies stocks are likely familiar with Henry Schein (HSIC) and Merit Medical (MMSI). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive 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, Henry Schein has a Zacks Rank of #2 (Buy), while Merit Medical 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 only part of the picture for value investors.
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 14.03, while MMSI has a forward P/E of 23.66. We also note that HSIC has a PEG ratio of 2.05. 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. MMSI currently has a PEG ratio of 2.06.
Another notable valuation metric for HSIC is its P/B ratio of 2.32. 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, MMSI has a P/B of 3.26.
Based on these metrics and many more, HSIC holds a Value grade of A, while MMSI has a Value grade of C.
HSIC has seen stronger estimate revision activity and sports more attractive valuation metrics than MMSI, so it seems like value investors will conclude that HSIC is the superior option right now.
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Henry Schein, Inc. (HSIC) : Free Stock Analysis Report
Merit Medical Systems, Inc. (MMSI) : Free Stock Analysis Report
