Back to top

Image: Bigstock

XRAY or MMSI: Which Is the Better Value Stock Right Now?

Read MoreHide Full Article

Investors interested in stocks from the Medical - Dental Supplies sector have probably already heard of Dentsply International (XRAY - Free Report) and Merit Medical (MMSI - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, Dentsply International has a Zacks Rank of #2 (Buy), while Merit Medical has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that XRAY likely has seen a stronger improvement to its earnings outlook than MMSI has recently. 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 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.

XRAY currently has a forward P/E ratio of 21.33, while MMSI has a forward P/E of 28.65. We also note that XRAY has a PEG ratio of 2.21. 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. MMSI currently has a PEG ratio of 2.47.

Another notable valuation metric for XRAY is its P/B ratio of 2.14. 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, MMSI has a P/B of 3.38.

These are just a few of the metrics contributing to XRAY's Value grade of B and MMSI's Value grade of D.

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


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


DENTSPLY SIRONA Inc. (XRAY) - free report >>

Merit Medical Systems, Inc. (MMSI) - free report >>

Published in