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PDCO 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 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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Patterson Cos. and Conmed are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. Investors should feel comfortable knowing that PDCO likely has seen a stronger improvement to its earnings outlook than CNMD has recently. But this is just one piece of the puzzle for value investors.

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 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.

PDCO currently has a forward P/E ratio of 13.77, while CNMD has a forward P/E of 31.94. We also note that PDCO has a PEG ratio of 1.39. 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 2.59.

Another notable valuation metric for PDCO is its P/B ratio of 2.90. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, CNMD has a P/B of 4.25.

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

PDCO 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 PDCO is likely the superior value option right now.


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