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

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Investors interested in stocks from the Medical - Dental Supplies sector have probably already heard of Henry Schein (HSIC - Free Report) and Conmed (CNMD - 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Currently, Henry Schein has a Zacks Rank of #2 (Buy), while Conmed 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 HSIC has an improving earnings outlook. But this is just one piece of the puzzle 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.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

HSIC currently has a forward P/E ratio of 18.04, while CNMD has a forward P/E of 41.51. We also note that HSIC has a PEG ratio of 1.30. 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. CNMD currently has a PEG ratio of 4.18.

Another notable valuation metric for HSIC is its P/B ratio of 2.64. 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, CNMD has a P/B of 5.19.

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

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


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

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