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SEM vs. HUM: Which Stock Should Value Investors Buy Now?
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Investors interested in stocks from the Medical - HMOs sector have probably already heard of Select Medical (SEM - Free Report) and Humana (HUM - 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.
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, Select Medical is sporting a Zacks Rank of #2 (Buy), while Humana has a Zacks Rank of #3 (Hold). This means that SEM'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.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
SEM currently has a forward P/E ratio of 11.20, while HUM has a forward P/E of 15.94. We also note that SEM has a PEG ratio of 0.75. 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. HUM currently has a PEG ratio of 1.15.
Another notable valuation metric for SEM is its P/B ratio of 2.22. 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, HUM has a P/B of 3.27.
These metrics, and several others, help SEM earn a Value grade of A, while HUM has been given a Value grade of C.
SEM is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that SEM is likely the superior value option right now.
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SEM vs. HUM: Which Stock Should Value Investors Buy Now?
Investors interested in stocks from the Medical - HMOs sector have probably already heard of Select Medical (SEM - Free Report) and Humana (HUM - 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.
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, Select Medical is sporting a Zacks Rank of #2 (Buy), while Humana has a Zacks Rank of #3 (Hold). This means that SEM'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.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
SEM currently has a forward P/E ratio of 11.20, while HUM has a forward P/E of 15.94. We also note that SEM has a PEG ratio of 0.75. 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. HUM currently has a PEG ratio of 1.15.
Another notable valuation metric for SEM is its P/B ratio of 2.22. 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, HUM has a P/B of 3.27.
These metrics, and several others, help SEM earn a Value grade of A, while HUM has been given a Value grade of C.
SEM is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that SEM is likely the superior value option right now.