Back to top

Image: Bigstock

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

Read MoreHide Full Article

Investors interested in Medical - Dental Supplies stocks are likely familiar with Henry Schein (HSIC - Free Report) and Straumann Holding AG . 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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Henry Schein has a Zacks Rank of #2 (Buy), while Straumann Holding AG 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 only part of the picture 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 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 19.84, while SAUHF has a forward P/E of 53.40. We also note that HSIC has a PEG ratio of 2. 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. SAUHF currently has a PEG ratio of 4.85.

Another notable valuation metric for HSIC is its P/B ratio of 2.62. 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, SAUHF has a P/B of 18.74.

Based on these metrics and many more, HSIC holds a Value grade of A, while SAUHF has a Value grade of C.

HSIC has seen stronger estimate revision activity and sports more attractive valuation metrics than SAUHF, so it seems like value investors will conclude that HSIC is the superior option right now.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Henry Schein, Inc. (HSIC) - free report >>

Published in