ZBH or LMAT: Which Is the Better Value Stock Right Now?
Investors with an interest in Medical - Products stocks have likely encountered both Zimmer Biomet (ZBH) and LeMaitre Vascular (LMAT). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Zimmer Biomet has a Zacks Rank of #2 (Buy), while LeMaitre Vascular has a Zacks Rank of #3 (Hold) right now. This means that ZBH'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 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 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.
ZBH currently has a forward P/E ratio of 19.75, while LMAT has a forward P/E of 47.23. We also note that ZBH has a PEG ratio of 3.18. 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. LMAT currently has a PEG ratio of 4.72.
Another notable valuation metric for ZBH is its P/B ratio of 2.43. 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, LMAT has a P/B of 4.50.
Based on these metrics and many more, ZBH holds a Value grade of B, while LMAT has a Value grade of D.
ZBH has seen stronger estimate revision activity and sports more attractive valuation metrics than LMAT, so it seems like value investors will conclude that ZBH is the superior option right now.
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Zimmer Biomet Holdings, Inc. (ZBH) : Free Stock Analysis Report
LeMaitre Vascular, Inc. (LMAT) : Free Stock Analysis Report
