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HSIC or WST: Which Is the Better Value Stock Right Now?

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Investors looking for stocks in the Medical - Dental Supplies sector might want to consider either Henry Schein (HSIC - Free Report) or West Pharmaceutical Services (WST - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, Henry Schein is sporting a Zacks Rank of #1 (Strong Buy), while West Pharmaceutical Services has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that HSIC likely has seen a stronger improvement to its earnings outlook than WST has recently. However, value investors will care about much more than just this.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.

HSIC currently has a forward P/E ratio of 14.51, while WST has a forward P/E of 42.66. We also note that HSIC has a PEG ratio of 1.79. 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. WST currently has a PEG ratio of 2.83.

Another notable valuation metric for HSIC is its P/B ratio of 2.55. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, WST has a P/B of 8.69.

Based on these metrics and many more, HSIC holds a Value grade of A, while WST has a Value grade of C.

HSIC sticks out from WST in both our Zacks Rank and Style Scores models, so value investors will likely feel that HSIC is the better option right now.


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Henry Schein, Inc. (HSIC) - free report >>

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