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BIIB vs. ILMN: Which Stock Should Value Investors Buy Now?

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Investors interested in Medical - Biomedical and Genetics stocks are likely familiar with Biogen Inc. (BIIB - Free Report) and Illumina (ILMN - 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.

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.

Right now, both Biogen Inc. and Illumina are sporting a Zacks Rank of # 2 (Buy). This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. But this is only part of the picture for value investors.

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 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.

BIIB currently has a forward P/E ratio of 13.07, while ILMN has a forward P/E of 49.31. We also note that BIIB has a PEG ratio of 0.98. 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. ILMN currently has a PEG ratio of 1.58.

Another notable valuation metric for BIIB is its P/B ratio of 2.52. 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, ILMN has a P/B of 2.91.

These are just a few of the metrics contributing to BIIB's Value grade of A and ILMN's Value grade of C.

Both BIIB and ILMN are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that BIIB is the superior value option right now.


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Biogen Inc. (BIIB) - free report >>

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