OPCH vs. CHE: Which Stock Is the Better Value Option?
Investors interested in stocks from the Medical - Outpatient and Home Healthcare sector have probably already heard of Option Care (OPCH) and Chemed (CHE). 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, Option Care has a Zacks Rank of #1 (Strong Buy), while Chemed has a Zacks Rank of #4 (Sell). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that OPCH has an improving earnings 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 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.
OPCH currently has a forward P/E ratio of 24.90, while CHE has a forward P/E of 25.73. We also note that OPCH has a PEG ratio of 1.23. 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. CHE currently has a PEG ratio of 2.96.
Another notable valuation metric for OPCH is its P/B ratio of 4.30. 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, CHE has a P/B of 8.14.
These metrics, and several others, help OPCH earn a Value grade of B, while CHE has been given a Value grade of C.
OPCH sticks out from CHE in both our Zacks Rank and Style Scores models, so value investors will likely feel that OPCH is the better option right now.
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Option Care Health, Inc. (OPCH) : Free Stock Analysis Report
Chemed Corporation (CHE) : Free Stock Analysis Report
