Back to top

Image: Bigstock

PBH vs. BSX: Which Stock Should Value Investors Buy Now?

Read MoreHide Full Article

Investors interested in stocks from the Medical - Products sector have probably already heard of Prestige Consumer Healthcare (PBH - Free Report) and Boston Scientific (BSX - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Prestige Consumer Healthcare and Boston Scientific are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that PBH's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.

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.

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.

PBH currently has a forward P/E ratio of 13.88, while BSX has a forward P/E of 27. We also note that PBH has a PEG ratio of 1.73. 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. BSX currently has a PEG ratio of 2.11.

Another notable valuation metric for PBH is its P/B ratio of 2. 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, BSX has a P/B of 4.07.

These metrics, and several others, help PBH earn a Value grade of B, while BSX has been given a Value grade of C.

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


See More Zacks Research for These Tickers


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


Boston Scientific Corporation (BSX) - free report >>

Prestige Consumer Healthcare Inc. (PBH) - free report >>

Published in