USNA vs. ZTS: Which Stock Should Value Investors Buy Now?
Investors with an interest in Medical - Drugs stocks have likely encountered both USANA Health Sciences (USNA) and Zoetis (ZTS). But which of these two companies is the best option for those looking for undervalued stocks? 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 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 sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that USNA likely has seen a stronger improvement to its earnings outlook than ZTS has recently. 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.
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 19.86, while ZTS has a forward P/E of 33.71. We also note that USNA has a PEG ratio of 1.66. 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. ZTS currently has a PEG ratio of 2.94.
Another notable valuation metric for USNA is its P/B ratio of 2.63. 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, ZTS has a P/B of 18.28.
Based on these metrics and many more, USNA holds a Value grade of A, while ZTS has a Value grade of C.
USNA sticks out from ZTS in both our Zacks Rank and Style Scores models, so value investors will likely feel that USNA is the better option right now.
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USANA Health Sciences, Inc. (USNA) : Free Stock Analysis Report
Zoetis Inc. (ZTS) : Free Stock Analysis Report
