Back to top

Image: Bigstock

HOLX or EW: Which Is the Better Value Stock Right Now?

Read MoreHide Full Article

Investors interested in Medical - Instruments stocks are likely familiar with Hologic (HOLX - Free Report) and Edwards Lifesciences (EW - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. 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.

Hologic and Edwards Lifesciences are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that HOLX is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.

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.

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.

HOLX currently has a forward P/E ratio of 21.49, while EW has a forward P/E of 31.28. We also note that HOLX has a PEG ratio of 1.41. 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. EW currently has a PEG ratio of 4.59.

Another notable valuation metric for HOLX is its P/B ratio of 3.89. 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, EW has a P/B of 8.39.

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

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


See More Zacks Research for These Tickers


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


Edwards Lifesciences Corporation (EW) - free report >>

Hologic, Inc. (HOLX) - free report >>

Published in