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NVS or LLY: Which Is the Better Value Stock Right Now?
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Investors looking for stocks in the Large Cap Pharmaceuticals sector might want to consider either Novartis (NVS - Free Report) or Eli Lilly (LLY - 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 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.
Currently, Novartis has a Zacks Rank of #2 (Buy), while Eli Lilly has a Zacks Rank of #3 (Hold). This means that NVS'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 try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.
NVS currently has a forward P/E ratio of 14.76, while LLY has a forward P/E of 51.58. We also note that NVS has a PEG ratio of 1.65. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. LLY currently has a PEG ratio of 2.07.
Another notable valuation metric for NVS is its P/B ratio of 4.05. 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, LLY has a P/B of 38.05.
These are just a few of the metrics contributing to NVS's Value grade of B and LLY's Value grade of C.
NVS 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 NVS is likely the superior value option right now.
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NVS or LLY: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Large Cap Pharmaceuticals sector might want to consider either Novartis (NVS - Free Report) or Eli Lilly (LLY - 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 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.
Currently, Novartis has a Zacks Rank of #2 (Buy), while Eli Lilly has a Zacks Rank of #3 (Hold). This means that NVS'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 try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.
NVS currently has a forward P/E ratio of 14.76, while LLY has a forward P/E of 51.58. We also note that NVS has a PEG ratio of 1.65. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. LLY currently has a PEG ratio of 2.07.
Another notable valuation metric for NVS is its P/B ratio of 4.05. 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, LLY has a P/B of 38.05.
These are just a few of the metrics contributing to NVS's Value grade of B and LLY's Value grade of C.
NVS 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 NVS is likely the superior value option right now.