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ABC or ALGN: Which Is the Better Value Stock Right Now?

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Investors interested in Medical - Dental Supplies stocks are likely familiar with AmerisourceBergen and Align Technology (ALGN - Free Report) . 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.

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

Currently, AmerisourceBergen has a Zacks Rank of #2 (Buy), while Align Technology has a Zacks Rank of #3 (Hold). This means that ABC's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst 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 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.

ABC currently has a forward P/E ratio of 12.88, while ALGN has a forward P/E of 50.13. We also note that ABC has a PEG ratio of 1.70. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. ALGN currently has a PEG ratio of 2.14.

Another notable valuation metric for ABC is its P/B ratio of 6.10. 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, ALGN has a P/B of 17.55.

These are just a few of the metrics contributing to ABC's Value grade of A and ALGN's Value grade of D.

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


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