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CPSI or OMCL: Which Is the Better Value Stock Right Now?

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Investors looking for stocks in the Medical Info Systems sector might want to consider either Computer Programs and Systems or Omnicell (OMCL - 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.

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, Computer Programs and Systems is sporting a Zacks Rank of #2 (Buy), while Omnicell has a Zacks Rank of #4 (Sell). This means that CPSI's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture for value investors.

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.

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.

CPSI currently has a forward P/E ratio of 12.14, while OMCL has a forward P/E of 31.26. We also note that CPSI has a PEG ratio of 0.87. 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. OMCL currently has a PEG ratio of 1.95.

Another notable valuation metric for CPSI is its P/B ratio of 2.20. 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, OMCL has a P/B of 4.52.

These are just a few of the metrics contributing to CPSI's Value grade of A and OMCL's Value grade of C.

CPSI is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that CPSI is likely the superior value option right now.


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