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CVS or HQY: Which Is the Better Value Stock Right Now?
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Investors interested in stocks from the Medical Services sector have probably already heard of CVS Health (CVS - Free Report) and HealthEquity (HQY - 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.
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.
CVS Health and HealthEquity are both sporting a Zacks Rank of #2 (Buy) right now. This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. But this is just one factor that value investors are interested in.
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.
CVS currently has a forward P/E ratio of 12.96, while HQY has a forward P/E of 24.08. We also note that CVS has a PEG ratio of 0.91. 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. HQY currently has a PEG ratio of 1.11.
Another notable valuation metric for CVS is its P/B ratio of 1.35. 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, HQY has a P/B of 3.73.
Based on these metrics and many more, CVS holds a Value grade of A, while HQY has a Value grade of C.
Both CVS and HQY are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that CVS is the superior value option right now.
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CVS or HQY: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Medical Services sector have probably already heard of CVS Health (CVS - Free Report) and HealthEquity (HQY - 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.
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.
CVS Health and HealthEquity are both sporting a Zacks Rank of #2 (Buy) right now. This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. But this is just one factor that value investors are interested in.
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.
CVS currently has a forward P/E ratio of 12.96, while HQY has a forward P/E of 24.08. We also note that CVS has a PEG ratio of 0.91. 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. HQY currently has a PEG ratio of 1.11.
Another notable valuation metric for CVS is its P/B ratio of 1.35. 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, HQY has a P/B of 3.73.
Based on these metrics and many more, CVS holds a Value grade of A, while HQY has a Value grade of C.
Both CVS and HQY are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that CVS is the superior value option right now.