Investors looking for stocks in the Medical - Products sector might want to consider either VAREX IMAGING (VREX - Free Report) or Boston Scientific (BSX - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 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.
Right now, VAREX IMAGING is sporting a Zacks Rank of #2 (Buy), while Boston Scientific has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that VREX is likely seeing its earnings outlook improve to a greater extent. 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.
VREX currently has a forward P/E ratio of 19.94, while BSX has a forward P/E of 24.50. We also note that VREX has a PEG ratio of 1.99. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. BSX currently has a PEG ratio of 2.25.
Another notable valuation metric for VREX is its P/B ratio of 2.32. 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, BSX has a P/B of 5.73.
These are just a few of the metrics contributing to VREX's Value grade of A and BSX's Value grade of C.
VREX sticks out from BSX in both our Zacks Rank and Style Scores models, so value investors will likely feel that VREX is the better option right now.