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MYL vs. SUPN: Which Stock Is the Better Value Option?

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Investors looking for stocks in the Medical - Generic Drugs sector might want to consider either Mylan or Supernus Pharmaceuticals (SUPN - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's 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 is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Mylan and Supernus Pharmaceuticals are sporting Zacks Ranks of #2 (Buy) and #5 (Strong Sell), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that MYL has an improving earnings outlook. But this is just one piece of the puzzle for value investors.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.

MYL currently has a forward P/E ratio of 5.69, while SUPN has a forward P/E of 15.32. We also note that MYL has a PEG ratio of 0.88. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. SUPN currently has a PEG ratio of 0.90.

Another notable valuation metric for MYL is its P/B ratio of 1.24. 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, SUPN has a P/B of 4.45.

These are just a few of the metrics contributing to MYL's Value grade of A and SUPN's Value grade of D.

MYL is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that MYL is likely the superior value option right now.


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