OCDX vs. DOCS: Which Stock Is the Better Value Option?
Investors interested in stocks from the Medical Services sector have probably already heard of Ortho Clinical Diagnostics (OCDX) and Doximity (DOCS). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, both Ortho Clinical Diagnostics and Doximity are sporting a Zacks Rank of # 2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is just one piece of the puzzle for value investors.
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.
OCDX currently has a forward P/E ratio of 19.83, while DOCS has a forward P/E of 70.89. We also note that OCDX has a PEG ratio of 1.54. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. DOCS currently has a PEG ratio of 8.86.
Another notable valuation metric for OCDX is its P/B ratio of 9.98. 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, DOCS has a P/B of 13.01.
These are just a few of the metrics contributing to OCDX's Value grade of B and DOCS's Value grade of F.
Both OCDX and DOCS are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that OCDX is the superior value option right now.
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Ortho Clinical Diagnostics Holdings PLC (OCDX) : Free Stock Analysis Report
Doximity, Inc. (DOCS) : Free Stock Analysis Report
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