Back to top

Image: Bigstock

PINC or HQY: Which Is the Better Value Stock Right Now?

Read MoreHide Full Article

Investors interested in stocks from the Medical Services sector have probably already heard of Premier, Inc. (PINC - Free Report) and HealthEquity (HQY - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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.

Currently, both Premier, Inc. and HealthEquity are holding a Zacks Rank of # 2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. However, value investors will care about much more than just this.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.

PINC currently has a forward P/E ratio of 15.49, while HQY has a forward P/E of 42.32. We also note that PINC has a PEG ratio of 1.81. 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. HQY currently has a PEG ratio of 2.91.

Another notable valuation metric for PINC is its P/B ratio of 2.08. 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, HQY has a P/B of 2.83.

These are just a few of the metrics contributing to PINC's Value grade of B and HQY's Value grade of F.

Both PINC and HQY are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that PINC is the superior value option right now.


In-Depth Zacks Research for the Tickers Above


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


Premier, Inc. (PINC) - free report >>

HealthEquity, Inc. (HQY) - free report >>

Published in