JAZZ vs. ZTS: Which Stock Is the Better Value Option?
Investors with an interest in Medical - Drugs stocks have likely encountered both Jazz Pharmaceuticals (JAZZ) and Zoetis (ZTS). 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, Jazz Pharmaceuticals has a Zacks Rank of #2 (Buy), while Zoetis has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that JAZZ likely has seen a stronger improvement to its earnings outlook than ZTS has recently. But this is just one piece of the puzzle for value investors.
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.
JAZZ currently has a forward P/E ratio of 6.98, while ZTS has a forward P/E of 30.30. We also note that JAZZ has a PEG ratio of 0.78. 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. ZTS currently has a PEG ratio of 2.65.
Another notable valuation metric for JAZZ is its P/B ratio of 2.37. 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, ZTS has a P/B of 16.37.
Based on these metrics and many more, JAZZ holds a Value grade of A, while ZTS has a Value grade of D.
JAZZ has seen stronger estimate revision activity and sports more attractive valuation metrics than ZTS, so it seems like value investors will conclude that JAZZ is the superior option right now.
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Jazz Pharmaceuticals PLC (JAZZ) : Free Stock Analysis Report
Zoetis Inc. (ZTS) : Free Stock Analysis Report
