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BMY vs. ILMN: Which Stock Should Value Investors Buy Now?
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Investors interested in stocks from the Medical - Biomedical and Genetics sector have probably already heard of Bristol Myers Squibb (BMY - Free Report) and Illumina (ILMN - 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.
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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, Bristol Myers Squibb has a Zacks Rank of #2 (Buy), while Illumina has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that BMY has an improving earnings 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.
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.
BMY currently has a forward P/E ratio of 8.48, while ILMN has a forward P/E of 71.56. We also note that BMY has a PEG ratio of 1.22. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. ILMN currently has a PEG ratio of 10.22.
Another notable valuation metric for BMY is its P/B ratio of 3.77. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, ILMN has a P/B of 11.96.
Based on these metrics and many more, BMY holds a Value grade of B, while ILMN has a Value grade of D.
BMY 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 BMY is likely the superior value option right now.
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BMY vs. ILMN: Which Stock Should Value Investors Buy Now?
Investors interested in stocks from the Medical - Biomedical and Genetics sector have probably already heard of Bristol Myers Squibb (BMY - Free Report) and Illumina (ILMN - 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.
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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, Bristol Myers Squibb has a Zacks Rank of #2 (Buy), while Illumina has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that BMY has an improving earnings 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.
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.
BMY currently has a forward P/E ratio of 8.48, while ILMN has a forward P/E of 71.56. We also note that BMY has a PEG ratio of 1.22. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. ILMN currently has a PEG ratio of 10.22.
Another notable valuation metric for BMY is its P/B ratio of 3.77. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, ILMN has a P/B of 11.96.
Based on these metrics and many more, BMY holds a Value grade of B, while ILMN has a Value grade of D.
BMY 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 BMY is likely the superior value option right now.