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XRAY vs. COO: Which Stock Is the Better Value Option?
Investors with an interest in Medical - Dental Supplies stocks have likely encountered both Dentsply International (XRAY - Free Report) and The Cooper Companies (COO - 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.
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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, Dentsply International is sporting a Zacks Rank of #2 (Buy), while The Cooper Companies 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 XRAY has an improving earnings outlook. But this is just one factor that value investors are interested in.
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 Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
XRAY currently has a forward P/E ratio of 20.37, while COO has a forward P/E of 29.17. We also note that XRAY has a PEG ratio of 2.23. 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. COO currently has a PEG ratio of 2.65.
Another notable valuation metric for XRAY is its P/B ratio of 2.27. 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, COO has a P/B of 2.50.
Based on these metrics and many more, XRAY holds a Value grade of B, while COO has a Value grade of C.
XRAY 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 XRAY is likely the superior value option right now.