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HAE vs. ABT: Which Stock Is the Better Value Option?

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Investors looking for stocks in the Medical - Products sector might want to consider either Haemonetics (HAE - Free Report) or Abbott (ABT - 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.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Haemonetics and Abbott are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that HAE likely has seen a stronger improvement to its earnings outlook than ABT has recently. 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.

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.

HAE currently has a forward P/E ratio of 20.12, while ABT has a forward P/E of 23.94. We also note that HAE has a PEG ratio of 2.01. 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. ABT currently has a PEG ratio of 2.66.

Another notable valuation metric for HAE is its P/B ratio of 4.59. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, ABT has a P/B of 4.94.

These are just a few of the metrics contributing to HAE's Value grade of B and ABT's Value grade of C.

HAE 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 HAE is likely the superior value option right now.


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