Back to top

Image: Bigstock

TFX or SONVY: Which Is the Better Value Stock Right Now?

Read MoreHide Full Article

Investors interested in Medical - Instruments stocks are likely familiar with Teleflex (TFX - Free Report) and SONOVA HOLDING (SONVY - 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Teleflex has a Zacks Rank of #2 (Buy), while SONOVA HOLDING has a Zacks Rank of #3 (Hold) right now. This means that TFX's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.

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 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.

TFX currently has a forward P/E ratio of 17.36, while SONVY has a forward P/E of 21.87. We also note that TFX has a PEG ratio of 0.84. 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. SONVY currently has a PEG ratio of 2.42.

Another notable valuation metric for TFX is its P/B ratio of 1.91. 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, SONVY has a P/B of 5.51.

These metrics, and several others, help TFX earn a Value grade of B, while SONVY has been given a Value grade of D.

TFX sticks out from SONVY in both our Zacks Rank and Style Scores models, so value investors will likely feel that TFX is the better option right now.

Published in