Back to top

Image: Bigstock

PAHC vs. SYK: Which Stock Should Value Investors Buy Now?

Read MoreHide Full Article

Investors interested in stocks from the Medical - Products sector have probably already heard of Phibro Animal Health (PAHC - Free Report) and Stryker (SYK - 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.

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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Right now, Phibro Animal Health is sporting a Zacks Rank of #2 (Buy), while Stryker has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that PAHC likely has seen a stronger improvement to its earnings outlook than SYK has recently. But this is only part of the picture for value investors.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

PAHC currently has a forward P/E ratio of 22.78, while SYK has a forward P/E of 27.73. We also note that PAHC has a PEG ratio of 2.15. 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. SYK currently has a PEG ratio of 2.89.

Another notable valuation metric for PAHC is its P/B ratio of 5.40. 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, SYK has a P/B of 7.10.

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

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


See More Zacks Research for These Tickers


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


Stryker Corporation (SYK) - free report >>

Phibro Animal Health Corporation (PAHC) - free report >>

Published in