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XRAY vs. CNMD: Which Stock Is the Better Value Option?

Zacks Equity Research

Investors interested in stocks from the Medical - Dental Supplies sector have probably already heard of Dentsply International (XRAY) and Conmed (CNMD). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Currently, both Dentsply International and Conmed are holding a Zacks Rank of # 2 (Buy). 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. 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 Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

XRAY currently has a forward P/E ratio of 21.65, while CNMD has a forward P/E of 39.51. We also note that XRAY has a PEG ratio of 1.89. 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. CNMD currently has a PEG ratio of 2.66.

Another notable valuation metric for XRAY is its P/B ratio of 2.24. 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, CNMD has a P/B of 4.09.

Based on these metrics and many more, XRAY holds a Value grade of B, while CNMD has a Value grade of C.

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


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DENTSPLY SIRONA Inc. (XRAY) : Free Stock Analysis Report
 
CONMED Corporation (CNMD) : Free Stock Analysis Report
 
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