Back to top

Image: Bigstock

REGN vs. BMRN: Which Stock Is the Better Value Option?

Read MoreHide Full Article

Investors looking for stocks in the Medical - Biomedical and Genetics sector might want to consider either Regeneron (REGN - Free Report) or BioMarin Pharmaceutical (BMRN - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Regeneron has a Zacks Rank of #2 (Buy), while BioMarin Pharmaceutical has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that REGN likely has seen a stronger improvement to its earnings outlook than BMRN has recently. But this is just one piece of the puzzle for value investors.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

REGN currently has a forward P/E ratio of 20.57, while BMRN has a forward P/E of 69.93. We also note that REGN has a PEG ratio of 1.05. 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. BMRN currently has a PEG ratio of 1.19.

Another notable valuation metric for REGN is its P/B ratio of 5.24. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, BMRN has a P/B of 5.89.

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

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


See More Zacks Research for These Tickers


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


Regeneron Pharmaceuticals, Inc. (REGN) - free report >>

BioMarin Pharmaceutical Inc. (BMRN) - free report >>

Published in