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ADUS vs. AMED: Which Stock Should Value Investors Buy Now?

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Investors interested in stocks from the Medical - Outpatient and Home Healthcare sector have probably already heard of Addus HomeCare (ADUS - Free Report) and Amedisys (AMED - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? 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 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.

Addus HomeCare has a Zacks Rank of #1 (Strong Buy), while Amedisys has a Zacks Rank of #2 (Buy) right now. Investors should feel comfortable knowing that ADUS likely has seen a stronger improvement to its earnings outlook than AMED has recently. But this is just one piece of the puzzle for value investors.

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.

ADUS currently has a forward P/E ratio of 25.07, while AMED has a forward P/E of 31.58. We also note that ADUS has a PEG ratio of 1.67. 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. AMED currently has a PEG ratio of 1.68.

Another notable valuation metric for ADUS is its P/B ratio of 2.80. 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, AMED has a P/B of 9.13.

These are just a few of the metrics contributing to ADUS's Value grade of B and AMED's Value grade of C.

ADUS has seen stronger estimate revision activity and sports more attractive valuation metrics than AMED, so it seems like value investors will conclude that ADUS is the superior option right now.


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Amedisys, Inc. (AMED) - free report >>

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