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REGN or TECH: Which Is the Better Value Stock Right Now?

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Investors looking for stocks in the Medical - Biomedical and Genetics sector might want to consider either Regeneron (REGN - Free Report) or Techne (TECH - 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.

Right now, Regeneron is sporting a Zacks Rank of #2 (Buy), while Techne has a Zacks Rank of #3 (Hold). This means that REGN's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. 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.

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.

REGN currently has a forward P/E ratio of 16.81, while TECH has a forward P/E of 41.13. We also note that REGN has a PEG ratio of 1.87. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. TECH currently has a PEG ratio of 2.57.

Another notable valuation metric for REGN is its P/B ratio of 3.55. 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, TECH has a P/B of 7.75.

These metrics, and several others, help REGN earn a Value grade of B, while TECH has been given a Value grade of C.

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


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Regeneron Pharmaceuticals, Inc. (REGN) - free report >>

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