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PBH vs. SYK: Which Stock Is the Better Value Option?
Investors with an interest in Medical - Products stocks have likely encountered both Prestige Consumer Healthcare (PBH - Free Report) and Stryker (SYK - 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.
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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, both Prestige Consumer Healthcare and Stryker are sporting a Zacks Rank of # 2 (Buy). Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. 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 18.13, while SYK has a forward P/E of 31.20. We also note that PBH has a PEG ratio of 2.27. 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. SYK currently has a PEG ratio of 2.84.
Another notable valuation metric for PBH is its P/B ratio of 2.30. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, SYK has a P/B of 7.11.
These are just a few of the metrics contributing to PBH's Value grade of B and SYK's Value grade of C.
Both PBH and SYK are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that PBH is the superior value option right now.