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PAHC vs. ABT: Which Stock Is the Better Value Option?
Investors interested in Medical - Products stocks are likely familiar with Phibro Animal Health (PAHC - Free Report) and Abbott (ABT - 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.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Phibro Animal Health has a Zacks Rank of #2 (Buy), while Abbott has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that PAHC 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.
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.
PAHC currently has a forward P/E ratio of 14.72, while ABT has a forward P/E of 25.21. We also note that PAHC has a PEG ratio of 0.61. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. ABT currently has a PEG ratio of 2.77.
Another notable valuation metric for PAHC is its P/B ratio of 3.72. 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, ABT has a P/B of 5.10.
These metrics, and several others, help PAHC earn a Value grade of A, while ABT has been given a Value grade of C.
PAHC stands above ABT thanks to its solid earnings outlook, and based on these valuation figures, we also feel that PAHC is the superior value option right now.