Investors interested in stocks from the Medical - HMOs sector have probably already heard of Molina (MOH - Free Report) and The Joint Corp. (JYNT - 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.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive 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.
Currently, both Molina and The Joint Corp. are holding a Zacks Rank of # 1 (Strong Buy). 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 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.
MOH currently has a forward P/E ratio of 11.88, while JYNT has a forward P/E of 93.61. We also note that MOH has a PEG ratio of 0.95. 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. JYNT currently has a PEG ratio of 9.36.
Another notable valuation metric for MOH is its P/B ratio of 4.41. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, JYNT has a P/B of 111.63.
These metrics, and several others, help MOH earn a Value grade of A, while JYNT has been given a Value grade of F.
Both MOH and JYNT are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that MOH is the superior value option right now.