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AMED vs. USPH: Which Stock Is the Better Value Option?

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Investors looking for stocks in the Medical - Outpatient and Home Healthcare sector might want to consider either Amedisys (AMED - Free Report) or U.S. Physical Therapy (USPH - 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.

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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, Amedisys is sporting a Zacks Rank of #2 (Buy), while U.S. Physical Therapy has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that AMED has an improving earnings outlook. However, value investors will care about much more than just this.

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.

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.

AMED currently has a forward P/E ratio of 32.35, while USPH has a forward P/E of 47.86. We also note that AMED has a PEG ratio of 1.99. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. USPH currently has a PEG ratio of 3.91.

Another notable valuation metric for AMED is its P/B ratio of 7.64. 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, USPH has a P/B of 7.78.

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

AMED stands above USPH thanks to its solid earnings outlook, and based on these valuation figures, we also feel that AMED is the superior value option right now.


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

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