PDCO vs. CNMD: Which Stock Is the Better Value Option?
Investors interested in Medical - Dental Supplies stocks are likely familiar with Patterson Cos. (PDCO) and Conmed (CNMD). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Patterson Cos. has a Zacks Rank of #2 (Buy), while Conmed has a Zacks Rank of #3 (Hold) right now. 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. But this is just one piece of the puzzle for value investors.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.
PDCO currently has a forward P/E ratio of 16.48, while CNMD has a forward P/E of 285.32. We also note that PDCO has a PEG ratio of 2.42. 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. CNMD currently has a PEG ratio of 32.79.
Another notable valuation metric for PDCO is its P/B ratio of 2.56. 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, CNMD has a P/B of 2.95.
Based on these metrics and many more, PDCO holds a Value grade of B, while CNMD has a Value grade of D.
PDCO stands above CNMD thanks to its solid earnings outlook, and based on these valuation figures, we also feel that PDCO is 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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