Investors with an interest in Medical - Dental Supplies stocks have likely encountered both Patterson Cos. (PDCO) and Conmed (CNMD). But which of these two stocks presents investors with the better value opportunity right now? Let's 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Both Patterson Cos. and Conmed have a Zacks Rank of # 2 (Buy) right now. 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 also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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 14.37, while CNMD has a forward P/E of 41.88. We also note that PDCO has a PEG ratio of 2.26. 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 2.79.
Another notable valuation metric for PDCO is its P/B ratio of 1.34. 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 4.47.
Based on these metrics and many more, PDCO holds a Value grade of A, while CNMD has a Value grade of C.
Both PDCO and CNMD are impressive stocks with solid earnings outlooks, but based on these valuation figures, we 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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