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PDCO or CNMD: Which Is the Better Value Stock Right Now?

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Investors interested in Medical - Dental Supplies stocks are likely familiar with Patterson Cos. (PDCO - Free Report) and Conmed (CNMD - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

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.

Patterson Cos. has a Zacks Rank of #2 (Buy), while Conmed has a Zacks Rank of #3 (Hold) right now. This means that PDCO's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.

PDCO currently has a forward P/E ratio of 15.15, while CNMD has a forward P/E of 37.75. We also note that PDCO has a PEG ratio of 1.52. 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. CNMD currently has a PEG ratio of 3.02.

Another notable valuation metric for PDCO is its P/B ratio of 3. 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, CNMD has a P/B of 5.20.

These metrics, and several others, help PDCO earn a Value grade of B, while CNMD has been given a Value grade of C.

PDCO stands above CNMD thanks to its solid earnings outlook, and based on these valuation figures, we also feel that PDCO is the superior value option right now.


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