TVTY vs. MEDP: Which Stock Should Value Investors Buy Now?
Investors interested in Medical Services stocks are likely familiar with Tivity Health (TVTY) and Medpace (MEDP). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
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, Tivity Health is sporting a Zacks Rank of #1 (Strong Buy), while Medpace has a Zacks Rank of #3 (Hold). This means that TVTY'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.
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.
TVTY currently has a forward P/E ratio of 8.82, while MEDP has a forward P/E of 22.41. We also note that TVTY has a PEG ratio of 0.85. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. MEDP currently has a PEG ratio of 1.87.
Another notable valuation metric for TVTY is its P/B ratio of 2.38. 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, MEDP has a P/B of 3.58.
Based on these metrics and many more, TVTY holds a Value grade of A, while MEDP has a Value grade of C.
TVTY stands above MEDP thanks to its solid earnings outlook, and based on these valuation figures, we also feel that TVTY is the superior value option right now.
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Healthways, Inc. (TVTY) : Free Stock Analysis Report
Medpace Holdings, Inc. (MEDP) : Free Stock Analysis Report
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