Back to top

Image: Bigstock

PBH vs. BSX: Which Stock Is the Better Value Option?

Read MoreHide Full Article

Investors with an interest in Medical - Products stocks have likely encountered both Prestige Consumer Healthcare (PBH - Free Report) and Boston Scientific (BSX - 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.

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.

Right now, Prestige Consumer Healthcare is sporting a Zacks Rank of #2 (Buy), while Boston Scientific has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that PBH has an improving earnings outlook. However, value investors will care about much more than just this.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

PBH currently has a forward P/E ratio of 13.39, while BSX has a forward P/E of 25.68. We also note that PBH has a PEG ratio of 1.67. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. BSX currently has a PEG ratio of 2.05.

Another notable valuation metric for PBH is its P/B ratio of 1.86. 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, BSX has a P/B of 3.95.

Based on these metrics and many more, PBH holds a Value grade of B, while BSX has a Value grade of D.

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