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HAE or SYK: Which Is the Better Value Stock Right Now?

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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.

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.

Both Haemonetics and Stryker have a Zacks Rank of # 2 (Buy) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. 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.

HAE currently has a forward P/E ratio of 23.25, while SYK has a forward P/E of 27.88. We also note that HAE has a PEG ratio of 2.33. 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. SYK currently has a PEG ratio of 2.79.

Another notable valuation metric for HAE is its P/B ratio of 5.19. 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, SYK has a P/B of 6.32.

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

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


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