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LH vs. COO: Which Stock Should Value Investors Buy Now?

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Investors interested in Medical - Dental Supplies stocks are likely familiar with LabCorp (LH) and 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.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

LabCorp has a Zacks Rank of #2 (Buy), while The Cooper Companies has a Zacks Rank of #4 (Sell) right now. Investors should feel comfortable knowing that LH likely has seen a stronger improvement to its earnings outlook than COO has recently. However, value investors will care about much more than just this.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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 10.59, while COO has a forward P/E of 28.78. We also note that LH has a PEG ratio of 1. 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 2.62.

Another notable valuation metric for LH is its P/B ratio of 2.60. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, COO has a P/B of 3.06.

These metrics, and several others, help LH earn a Value grade of A, while COO has been given a Value grade of C.

LH has seen stronger estimate revision activity and sports more attractive valuation metrics than COO, so it seems like value investors will conclude that LH is the superior option right now.


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Laboratory Corporation of America Holdings (LH) : Free Stock Analysis Report
 
The Cooper Companies, Inc. (COO) : Free Stock Analysis Report
 
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