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BMY or HZNP: Which Is the Better Value Stock Right Now?

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Investors looking for stocks in the Medical - Biomedical and Genetics sector might want to consider either Bristol Myers Squibb (BMY - Free Report) or Horizon Therapeutics . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive 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.

Bristol Myers Squibb has a Zacks Rank of #2 (Buy), while Horizon Therapeutics has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that BMY likely has seen a stronger improvement to its earnings outlook than HZNP has recently. But this is only part of the picture 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.

BMY currently has a forward P/E ratio of 8.87, while HZNP has a forward P/E of 26.87. We also note that BMY has a PEG ratio of 1.27. 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. HZNP currently has a PEG ratio of 1.92.

Another notable valuation metric for BMY is its P/B ratio of 3.94. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, HZNP has a P/B of 5.19.

These are just a few of the metrics contributing to BMY's Value grade of B and HZNP's Value grade of C.

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


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