SNY vs. LLY: Which Stock Is the Better Value Option?
Investors looking for stocks in the Large Cap Pharmaceuticals sector might want to consider either Sanofi (SNY) or Eli Lilly (LLY). 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, Sanofi is sporting a Zacks Rank of #2 (Buy), while Eli Lilly has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that SNY likely has seen a stronger improvement to its earnings outlook than LLY has recently. But this is only part of the picture for value investors.
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 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.
SNY currently has a forward P/E ratio of 13.30, while LLY has a forward P/E of 29.89. We also note that SNY has a PEG ratio of 1.35. 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. LLY currently has a PEG ratio of 1.86.
Another notable valuation metric for SNY is its P/B ratio of 1.78. 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, LLY has a P/B of 31.86.
These metrics, and several others, help SNY earn a Value grade of A, while LLY has been given a Value grade of C.
SNY sticks out from LLY in both our Zacks Rank and Style Scores models, so value investors will likely feel that SNY is the better option right now.
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Sanofi (SNY) : Free Stock Analysis Report
Eli Lilly and Company (LLY) : Free Stock Analysis Report
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