Back to top

Image: Bigstock

OCDX vs. PGNY: Which Stock Should Value Investors Buy Now?

Read MoreHide Full Article

Investors interested in Medical Services stocks are likely familiar with Ortho Clinical Diagnostics and Progyny (PGNY - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Ortho Clinical Diagnostics has a Zacks Rank of #2 (Buy), while Progyny has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that OCDX is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.

OCDX currently has a forward P/E ratio of 19.52, while PGNY has a forward P/E of 281.75. We also note that OCDX has a PEG ratio of 1.51. 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. PGNY currently has a PEG ratio of 13.38.

Another notable valuation metric for OCDX is its P/B ratio of 9.50. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, PGNY has a P/B of 14.42.

Based on these metrics and many more, OCDX holds a Value grade of B, while PGNY has a Value grade of D.

OCDX is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that OCDX is likely the superior value option right now.

In-Depth Zacks Research for the Tickers Above

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

Progyny, Inc. (PGNY) - free report >>

Published in