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PDCO vs. MMSI: Which Stock Is the Better Value Option?

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Investors interested in Medical - Dental Supplies stocks are likely familiar with Patterson Cos. (PDCO) and Merit Medical (MMSI). But which of these two stocks presents investors with the better value opportunity right now? 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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Right now, Patterson Cos. is sporting a Zacks Rank of #2 (Buy), while Merit Medical has a Zacks Rank of #3 (Hold). This means that PDCO's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.

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.

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 15.58, while MMSI has a forward P/E of 32.94. We also note that PDCO has a PEG ratio of 1.62. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. MMSI currently has a PEG ratio of 2.60.

Another notable valuation metric for PDCO is its P/B ratio of 3.13. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, MMSI has a P/B of 3.98.

These are just a few of the metrics contributing to PDCO's Value grade of B and MMSI's Value grade of C.

PDCO stands above MMSI 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
 
Merit Medical Systems, Inc. (MMSI) : Free Stock Analysis Report
 
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