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SYY or MED: Which Is the Better Value Stock Right Now?

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Investors with an interest in Food - Miscellaneous stocks have likely encountered both Sysco (SYY - Free Report) and Medifast (MED - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Sysco has a Zacks Rank of #2 (Buy), while Medifast has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that SYY has an improving earnings outlook. However, value investors will care about much more than just this.

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.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

SYY currently has a forward P/E ratio of 19.79, while MED has a forward P/E of 46.13. We also note that SYY has a PEG ratio of 1.87. 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. MED currently has a PEG ratio of 2.31.

Another notable valuation metric for SYY is its P/B ratio of 14.33. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, MED has a P/B of 24.12.

Based on these metrics and many more, SYY holds a Value grade of B, while MED has a Value grade of D.

SYY sticks out from MED in both our Zacks Rank and Style Scores models, so value investors will likely feel that SYY is the better option right now.


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