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EHC vs. AMED: Which Stock Should Value Investors Buy Now?
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Investors looking for stocks in the Medical - Outpatient and Home Healthcare sector might want to consider either Encompass Health (EHC - Free Report) or Amedisys (AMED - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive 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.
Right now, Encompass Health is sporting a Zacks Rank of #2 (Buy), while Amedisys has a Zacks Rank of #5 (Strong Sell). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that EHC has an improving earnings outlook. But this is just one piece of the puzzle 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 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.
EHC currently has a forward P/E ratio of 18.17, while AMED has a forward P/E of 30.09. We also note that EHC has a PEG ratio of 1.01. 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. AMED currently has a PEG ratio of 2.73.
Another notable valuation metric for EHC is its P/B ratio of 3.64. 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, AMED has a P/B of 7.22.
These metrics, and several others, help EHC earn a Value grade of A, while AMED has been given a Value grade of C.
EHC has seen stronger estimate revision activity and sports more attractive valuation metrics than AMED, so it seems like value investors will conclude that EHC is the superior option right now.
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EHC vs. AMED: Which Stock Should Value Investors Buy Now?
Investors looking for stocks in the Medical - Outpatient and Home Healthcare sector might want to consider either Encompass Health (EHC - Free Report) or Amedisys (AMED - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive 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.
Right now, Encompass Health is sporting a Zacks Rank of #2 (Buy), while Amedisys has a Zacks Rank of #5 (Strong Sell). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that EHC has an improving earnings outlook. But this is just one piece of the puzzle 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 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.
EHC currently has a forward P/E ratio of 18.17, while AMED has a forward P/E of 30.09. We also note that EHC has a PEG ratio of 1.01. 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. AMED currently has a PEG ratio of 2.73.
Another notable valuation metric for EHC is its P/B ratio of 3.64. 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, AMED has a P/B of 7.22.
These metrics, and several others, help EHC earn a Value grade of A, while AMED has been given a Value grade of C.
EHC has seen stronger estimate revision activity and sports more attractive valuation metrics than AMED, so it seems like value investors will conclude that EHC is the superior option right now.