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EYE or NEOG: Which Is the Better Value Stock Right Now?

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Investors interested in stocks from the Medical - Products sector have probably already heard of National Vision (EYE - Free Report) and Neogen (NEOG - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

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.

National Vision and Neogen are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that EYE is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.

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.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

EYE currently has a forward P/E ratio of 42.99, while NEOG has a forward P/E of 55.38. We also note that EYE has a PEG ratio of 2.42. 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. NEOG currently has a PEG ratio of 5.54.

Another notable valuation metric for EYE is its P/B ratio of 3.10. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, NEOG has a P/B of 5.28.

These metrics, and several others, help EYE earn a Value grade of B, while NEOG has been given a Value grade of D.

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


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