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ADUS or USPH: Which Is the Better Value Stock Right Now?

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Investors with an interest in Medical - Outpatient and Home Healthcare stocks have likely encountered both Addus HomeCare (ADUS - Free Report) and 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.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Currently, Addus HomeCare has 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 ADUS has an improving earnings outlook. 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 Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

ADUS currently has a forward P/E ratio of 16.24, while USPH has a forward P/E of 19.32. We also note that ADUS has a PEG ratio of 1.08. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. USPH currently has a PEG ratio of 1.61.

Another notable valuation metric for ADUS is its P/B ratio of 1.59. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, USPH has a P/B of 3.13.

These are just a few of the metrics contributing to ADUS's Value grade of B and USPH's Value grade of C.

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


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Addus HomeCare Corporation (ADUS) - free report >>

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