Back to top

QDEL vs. BAX: Which Stock Is the Better Value Option?

Read MoreHide Full Article

Investors looking for stocks in the Medical - Products sector might want to consider either Quidel (QDEL - Free Report) or Baxter International (BAX - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, Quidel is sporting a Zacks Rank of #1 (Strong Buy), while Baxter International has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that QDEL likely has seen a stronger improvement to its earnings outlook than BAX has recently. But this is only part of the picture 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.

QDEL currently has a forward P/E ratio of 18.89, while BAX has a forward P/E of 23.42. We also note that QDEL has a PEG ratio of 0.76. 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. BAX currently has a PEG ratio of 1.83.

Another notable valuation metric for QDEL is its P/B ratio of 4.72. 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, BAX has a P/B of 5.18.

These metrics, and several others, help QDEL earn a Value grade of B, while BAX has been given a Value grade of C.

QDEL 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 QDEL is likely the superior value option right now.


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Quidel Corporation (QDEL) - free report >>

Baxter International Inc. (BAX) - free report >>

Published in