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HAE vs. SYK: Which Stock Should Value Investors Buy Now?
Investors with an interest in Medical - Products stocks have likely encountered both Haemonetics (HAE - Free Report) and Stryker (SYK - 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.
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.
Haemonetics has a Zacks Rank of #2 (Buy), while Stryker has a Zacks Rank of #3 (Hold) right now. This means that HAE's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture 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.
HAE currently has a forward P/E ratio of 25.88, while SYK has a forward P/E of 27.38. We also note that HAE has a PEG ratio of 2.59. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. SYK currently has a PEG ratio of 2.81.
Another notable valuation metric for HAE is its P/B ratio of 4.96. 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, SYK has a P/B of 6.25.
Based on these metrics and many more, HAE holds a Value grade of B, while SYK has a Value grade of C.
HAE 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 HAE is likely the superior value option right now.