Investors with an interest in Medical - Dental Supplies stocks have likely encountered both LabCorp (LH) and Conmed (CNMD). 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.
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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
LabCorp and Conmed are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that LH's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. 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 grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
LH currently has a forward P/E ratio of 15.52, while CNMD has a forward P/E of 34.17. We also note that LH has a PEG ratio of 1.81. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. CNMD currently has a PEG ratio of 2.56.
Another notable valuation metric for LH is its P/B ratio of 2.43. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, CNMD has a P/B of 3.48.
These are just a few of the metrics contributing to LH's Value grade of B and CNMD's Value grade of C.
LH sticks out from CNMD in both our Zacks Rank and Style Scores models, so value investors will likely feel that LH is the better option right now.
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Laboratory Corporation of America Holdings (LH) : Free Stock Analysis Report
CONMED Corporation (CNMD) : Free Stock Analysis Report
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