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SNY or PFE: Which Is the Better Value Stock Right Now?

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Investors interested in stocks from the Large Cap Pharmaceuticals sector have probably already heard of Sanofi (SNY - Free Report) and Pfizer (PFE - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's 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.

Right now, Sanofi is sporting a Zacks Rank of #2 (Buy), while Pfizer has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that SNY likely has seen a stronger improvement to its earnings outlook than PFE has recently. However, value investors will care about much more than just this.

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 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.

SNY currently has a forward P/E ratio of 13.05, while PFE has a forward P/E of 14.91. We also note that SNY has a PEG ratio of 1.89. 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. PFE currently has a PEG ratio of 2.49.

Another notable valuation metric for SNY is its P/B ratio of 1.52. 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, PFE has a P/B of 4.03.

These are just a few of the metrics contributing to SNY's Value grade of A and PFE's Value grade of C.

SNY has seen stronger estimate revision activity and sports more attractive valuation metrics than PFE, so it seems like value investors will conclude that SNY is the superior option right now.


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