Investors interested in Medical - Dental Supplies stocks are likely familiar with Patterson Cos. (PDCO) and Conmed (CNMD). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, Patterson Cos. is sporting a Zacks Rank of #2 (Buy), while Conmed has a Zacks Rank of #4 (Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that PDCO is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.
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.
PDCO currently has a forward P/E ratio of 12.91, while CNMD has a forward P/E of 29.49. We also note that PDCO has a PEG ratio of 1.63. 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. CNMD currently has a PEG ratio of 2.66.
Another notable valuation metric for PDCO is its P/B ratio of 2.78. 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 4.45.
These are just a few of the metrics contributing to PDCO's Value grade of B and CNMD's Value grade of C.
PDCO is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that PDCO is likely the superior value option right now.
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Patterson Companies, Inc. (PDCO) : Free Stock Analysis Report
CONMED Corporation (CNMD) : Free Stock Analysis Report
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