PAHC vs. ABT: Which Stock Should Value Investors Buy Now?
Investors interested in Medical - Products stocks are likely familiar with Phibro Animal Health (PAHC) and Abbott (ABT). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Right now, Phibro Animal Health is sporting a Zacks Rank of #2 (Buy), while Abbott has a Zacks Rank of #5 (Strong Sell). This means that PAHC's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. 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.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
PAHC currently has a forward P/E ratio of 22.72, while ABT has a forward P/E of 25.08. We also note that PAHC has a PEG ratio of 2.14. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. ABT currently has a PEG ratio of 2.15.
Another notable valuation metric for PAHC is its P/B ratio of 5.38. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, ABT has a P/B of 5.83.
Based on these metrics and many more, PAHC holds a Value grade of B, while ABT has a Value grade of C.
PAHC sticks out from ABT in both our Zacks Rank and Style Scores models, so value investors will likely feel that PAHC is the better option right now.
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Phibro Animal Health Corporation (PAHC) : Free Stock Analysis Report
Abbott Laboratories (ABT) : Free Stock Analysis Report
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