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BMY or AZN: Which Is the Better Value Stock Right Now?

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Investors interested in stocks from the Large Cap Pharmaceuticals sector have probably already heard of Bristol-Myers Squibb (BMY - Free Report) and Astrazeneca (AZN - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's 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 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, Bristol-Myers Squibb is sporting a Zacks Rank of #2 (Buy), while Astrazeneca has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that BMY likely has seen a stronger improvement to its earnings outlook than AZN has recently. But this is just one factor that value investors are interested in.

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.

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.

BMY currently has a forward P/E ratio of 13.28, while AZN has a forward P/E of 27.39. We also note that BMY has a PEG ratio of 1.34. 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. AZN currently has a PEG ratio of 1.61.

Another notable valuation metric for BMY is its P/B ratio of 5.76. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, AZN has a P/B of 9.41.

Based on these metrics and many more, BMY holds a Value grade of A, while AZN has a Value grade of C.

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


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AstraZeneca PLC (AZN) - free report >>

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