PBH vs. BSX: Which Stock Is the Better Value Option?

BSX PBH

Investors interested in stocks from the Medical - Products sector have probably already heard of Prestige Consumer Healthcare (PBH - Free Report) and Boston Scientific (BSX - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Right now, Prestige Consumer Healthcare is sporting a Zacks Rank of #2 (Buy), while Boston Scientific has a Zacks Rank of #3 (Hold). This means that PBH's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle 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 highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

PBH currently has a forward P/E ratio of 13.63, while BSX has a forward P/E of 26.70. We also note that PBH has a PEG ratio of 1.70. 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. BSX currently has a PEG ratio of 2.09.

Another notable valuation metric for PBH is its P/B ratio of 1.97. 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, BSX has a P/B of 4.03.

These metrics, and several others, help PBH earn a Value grade of B, while BSX has been given a Value grade of C.

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

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