Investors interested in Medical - Products stocks are likely familiar with Perrigo (PRGO) and Bio-Rad Laboratories (BIO). But which of these two companies is the best option for those looking for undervalued stocks? 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Perrigo and Bio-Rad Laboratories are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that PRGO is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture for value investors.
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.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
PRGO currently has a forward P/E ratio of 11.89, while BIO has a forward P/E of 46.13. We also note that PRGO has a PEG ratio of 2.83. 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. BIO currently has a PEG ratio of 3.08.
Another notable valuation metric for PRGO is its P/B ratio of 1.12. 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, BIO has a P/B of 1.80.
Based on these metrics and many more, PRGO holds a Value grade of A, while BIO has a Value grade of C.
PRGO sticks out from BIO in both our Zacks Rank and Style Scores models, so value investors will likely feel that PRGO is the better option right now.
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Perrigo Company plc (PRGO) : Free Stock Analysis Report
Bio-Rad Laboratories, Inc. (BIO) : Free Stock Analysis Report
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