HSIC vs. ALGN: Which Stock Is the Better Value Option?

ALGN HSIC

Investors interested in Medical - Dental Supplies stocks are likely familiar with Henry Schein (HSIC - Free Report) 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.

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

Henry Schein has a Zacks Rank of #2 (Buy), while Align Technology has a Zacks Rank of #3 (Hold) right now. This means that HSIC's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.

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.

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.

HSIC currently has a forward P/E ratio of 15.05, while ALGN has a forward P/E of 39.42. We also note that HSIC has a PEG ratio of 1.85. 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. ALGN currently has a PEG ratio of 2.47.

Another notable valuation metric for HSIC is its P/B ratio of 2.65. 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 6.76.

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

HSIC stands above ALGN thanks to its solid earnings outlook, and based on these valuation figures, we also feel that HSIC is the superior value option right now.

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