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CNC or HUM: Which Is the Better Value Stock Right Now?
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Investors looking for stocks in the Medical - HMOs sector might want to consider either Centene (CNC - Free Report) or Humana (HUM - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, Centene has a Zacks Rank of #2 (Buy), while Humana has a Zacks Rank of #5 (Strong Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that CNC is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture for value investors.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
CNC currently has a forward P/E ratio of 11.38, while HUM has a forward P/E of 21.09. We also note that CNC has a PEG ratio of 0.95. 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. HUM currently has a PEG ratio of 1.99.
Another notable valuation metric for CNC is its P/B ratio of 1.58. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, HUM has a P/B of 2.75.
These metrics, and several others, help CNC earn a Value grade of A, while HUM has been given a Value grade of D.
CNC has seen stronger estimate revision activity and sports more attractive valuation metrics than HUM, so it seems like value investors will conclude that CNC is the superior option right now.
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CNC or HUM: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Medical - HMOs sector might want to consider either Centene (CNC - Free Report) or Humana (HUM - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, Centene has a Zacks Rank of #2 (Buy), while Humana has a Zacks Rank of #5 (Strong Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that CNC is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture for value investors.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
CNC currently has a forward P/E ratio of 11.38, while HUM has a forward P/E of 21.09. We also note that CNC has a PEG ratio of 0.95. 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. HUM currently has a PEG ratio of 1.99.
Another notable valuation metric for CNC is its P/B ratio of 1.58. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, HUM has a P/B of 2.75.
These metrics, and several others, help CNC earn a Value grade of A, while HUM has been given a Value grade of D.
CNC has seen stronger estimate revision activity and sports more attractive valuation metrics than HUM, so it seems like value investors will conclude that CNC is the superior option right now.