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ZBH or MDT: 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 Zimmer Biomet (ZBH - Free Report) and Medtronic (MDT - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? 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.
Both Zimmer Biomet and Medtronic have a Zacks Rank of # 2 (Buy) right now. Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. But this is just one piece of the puzzle for value investors.
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.
ZBH currently has a forward P/E ratio of 13.37, while MDT has a forward P/E of 16.40. We also note that ZBH has a PEG ratio of 2. 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. MDT currently has a PEG ratio of 2.23.
Another notable valuation metric for ZBH is its P/B ratio of 1.85. 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, MDT has a P/B of 2.38.
Based on these metrics and many more, ZBH holds a Value grade of B, while MDT has a Value grade of C.
Both ZBH and MDT are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that ZBH is the superior value option right now.
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ZBH or MDT: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Medical - Products sector have probably already heard of Zimmer Biomet (ZBH - Free Report) and Medtronic (MDT - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? 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.
Both Zimmer Biomet and Medtronic have a Zacks Rank of # 2 (Buy) right now. Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. But this is just one piece of the puzzle for value investors.
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.
ZBH currently has a forward P/E ratio of 13.37, while MDT has a forward P/E of 16.40. We also note that ZBH has a PEG ratio of 2. 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. MDT currently has a PEG ratio of 2.23.
Another notable valuation metric for ZBH is its P/B ratio of 1.85. 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, MDT has a P/B of 2.38.
Based on these metrics and many more, ZBH holds a Value grade of B, while MDT has a Value grade of C.
Both ZBH and MDT are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that ZBH is the superior value option right now.