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USNA vs. ZTS: Which Stock Should Value Investors Buy Now?

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Zacks Equity Research
·2 min read
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Investors looking for stocks in the Medical - Drugs sector might want to consider either USANA Health Sciences (USNA) or Zoetis (ZTS). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great 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.

USANA Health Sciences and Zoetis are both sporting a Zacks Rank of # 2 (Buy) right now. This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. However, value investors will care about much more than just this.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.

USNA currently has a forward P/E ratio of 16.34, while ZTS has a forward P/E of 35.19. We also note that USNA has a PEG ratio of 1.09. 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. ZTS currently has a PEG ratio of 2.88.

Another notable valuation metric for USNA is its P/B ratio of 4.80. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, ZTS has a P/B of 19.50.

Based on these metrics and many more, USNA holds a Value grade of A, while ZTS has a Value grade of D.

Both USNA and ZTS are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that USNA is the superior value option right now.


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USANA Health Sciences, Inc. (USNA) : Free Stock Analysis Report
 
Zoetis Inc. (ZTS) : Free Stock Analysis Report
 
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