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USNA vs. CTLT: Which Stock Is the Better Value Option?

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Investors with an interest in Medical - Drugs stocks have likely encountered both USANA Health Sciences (USNA - Free Report) and Catalent (CTLT - 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

USANA Health Sciences and Catalent are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that USNA'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 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.

USNA currently has a forward P/E ratio of 17.74, while CTLT has a forward P/E of 43.91. We also note that USNA has a PEG ratio of 1.18. 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. CTLT currently has a PEG ratio of 2.23.

Another notable valuation metric for USNA is its P/B ratio of 4.69. 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, CTLT has a P/B of 5.87.

These metrics, and several others, help USNA earn a Value grade of A, while CTLT has been given a Value grade of C.

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


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USANA Health Sciences, Inc. (USNA) - free report >>

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