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GILD or VRTX: Which Is the Better Value Stock Right Now?
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Investors interested in Medical - Biomedical and Genetics stocks are likely familiar with Gilead Sciences (GILD - Free Report) and Vertex Pharmaceuticals (VRTX - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 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.
Gilead Sciences and Vertex Pharmaceuticals are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that GILD has an improving earnings outlook. But this is just one piece of the puzzle for value investors.
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 highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
GILD currently has a forward P/E ratio of 11.99, while VRTX has a forward P/E of 25.16. We also note that GILD has a PEG ratio of 0.92. 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. VRTX currently has a PEG ratio of 2.51.
Another notable valuation metric for GILD is its P/B ratio of 4.71. 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, VRTX has a P/B of 6.12.
Based on these metrics and many more, GILD holds a Value grade of B, while VRTX has a Value grade of C.
GILD 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 GILD is likely the superior value option right now.
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GILD or VRTX: Which Is the Better Value Stock Right Now?
Investors interested in Medical - Biomedical and Genetics stocks are likely familiar with Gilead Sciences (GILD - Free Report) and Vertex Pharmaceuticals (VRTX - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 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.
Gilead Sciences and Vertex Pharmaceuticals are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that GILD has an improving earnings outlook. But this is just one piece of the puzzle for value investors.
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 highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
GILD currently has a forward P/E ratio of 11.99, while VRTX has a forward P/E of 25.16. We also note that GILD has a PEG ratio of 0.92. 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. VRTX currently has a PEG ratio of 2.51.
Another notable valuation metric for GILD is its P/B ratio of 4.71. 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, VRTX has a P/B of 6.12.
Based on these metrics and many more, GILD holds a Value grade of B, while VRTX has a Value grade of C.
GILD 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 GILD is likely the superior value option right now.