TMO vs. IDXX: Which Stock Is the Better Value Option?
Investors looking for stocks in the Medical - Instruments sector might want to consider either Thermo Fisher Scientific (TMO) or Idexx Laboratories (IDXX). 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 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.
Currently, both Thermo Fisher Scientific and Idexx Laboratories are holding a Zacks Rank of # 2 (Buy). 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 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.
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.
TMO currently has a forward P/E ratio of 23.75, while IDXX has a forward P/E of 52.23. We also note that TMO has a PEG ratio of 1.90. 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. IDXX currently has a PEG ratio of 2.90.
Another notable valuation metric for TMO is its P/B ratio of 4.99. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, IDXX has a P/B of 67.54.
These metrics, and several others, help TMO earn a Value grade of B, while IDXX has been given a Value grade of C.
Both TMO and IDXX are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that TMO is the superior value option right now.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Thermo Fisher Scientific Inc. (TMO) : Free Stock Analysis Report
IDEXX Laboratories, Inc. (IDXX) : Free Stock Analysis Report
