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EHC or AMED: Which Is the Better Value Stock Right Now?
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Investors looking for stocks in the Medical - Outpatient and Home Healthcare sector might want to consider either Encompass Health (EHC - Free Report) or Amedisys (AMED - 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.
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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Encompass Health has a Zacks Rank of #2 (Buy), while Amedisys has a Zacks Rank of #5 (Strong Sell) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that EHC has an improving earnings outlook. However, value investors will care about much more than just this.
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 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.
EHC currently has a forward P/E ratio of 17.38, while AMED has a forward P/E of 24.63. We also note that EHC has a PEG ratio of 0.96. 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. AMED currently has a PEG ratio of 2.23.
Another notable valuation metric for EHC is its P/B ratio of 3.52. 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, AMED has a P/B of 5.59.
These metrics, and several others, help EHC earn a Value grade of A, while AMED has been given a Value grade of C.
EHC sticks out from AMED in both our Zacks Rank and Style Scores models, so value investors will likely feel that EHC is the better option right now.
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EHC or AMED: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Medical - Outpatient and Home Healthcare sector might want to consider either Encompass Health (EHC - Free Report) or Amedisys (AMED - 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.
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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Encompass Health has a Zacks Rank of #2 (Buy), while Amedisys has a Zacks Rank of #5 (Strong Sell) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that EHC has an improving earnings outlook. However, value investors will care about much more than just this.
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 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.
EHC currently has a forward P/E ratio of 17.38, while AMED has a forward P/E of 24.63. We also note that EHC has a PEG ratio of 0.96. 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. AMED currently has a PEG ratio of 2.23.
Another notable valuation metric for EHC is its P/B ratio of 3.52. 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, AMED has a P/B of 5.59.
These metrics, and several others, help EHC earn a Value grade of A, while AMED has been given a Value grade of C.
EHC sticks out from AMED in both our Zacks Rank and Style Scores models, so value investors will likely feel that EHC is the better option right now.