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PBYI vs. AMGN: Which Stock Is the Better Value Option?

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Investors looking for stocks in the Medical - Biomedical and Genetics sector might want to consider either Puma Biotech (PBYI - Free Report) or Amgen (AMGN - 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.

Right now, Puma Biotech is sporting a Zacks Rank of #2 (Buy), while Amgen has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that PBYI likely has seen a stronger improvement to its earnings outlook than AMGN has recently. But this is just one factor that value investors are interested in.

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 grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

PBYI currently has a forward P/E ratio of 3.76, while AMGN has a forward P/E of 15.67. We also note that PBYI has a PEG ratio of 0.61. 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. AMGN currently has a PEG ratio of 3.70.

Another notable valuation metric for PBYI is its P/B ratio of 3.89. 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, AMGN has a P/B of 22.60.

Based on these metrics and many more, PBYI holds a Value grade of A, while AMGN has a Value grade of C.

PBYI sticks out from AMGN in both our Zacks Rank and Style Scores models, so value investors will likely feel that PBYI is the better option right now.


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