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PAHC vs. BSX: Which Stock Should Value Investors Buy Now?

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Investors looking for stocks in the Medical - Products sector might want to consider either Phibro Animal Health (PAHC - Free Report) or Boston Scientific (BSX - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, both Phibro Animal Health and Boston Scientific are sporting a Zacks Rank of #2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. But this is only part of the picture for value investors.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

PAHC currently has a forward P/E ratio of 14.38, while BSX has a forward P/E of 28.49. We also note that PAHC has a PEG ratio of 1.12. 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. BSX currently has a PEG ratio of 1.74.

Another notable valuation metric for PAHC is its P/B ratio of 5.17. 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, BSX has a P/B of 6.17.

Based on these metrics and many more, PAHC holds a Value grade of A, while BSX has a Value grade of C.

Both PAHC and BSX are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that PAHC is the superior value option right now.


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