Back to top

Image: Bigstock

BDX vs. MMSI: Which Stock Should Value Investors Buy Now?

Read MoreHide Full Article

Investors looking for stocks in the Medical - Dental Supplies sector might want to consider either Becton Dickinson (BDX - Free Report) or Merit Medical (MMSI - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. 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, Becton Dickinson is sporting a Zacks Rank of #2 (Buy), while Merit Medical 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 BDX has an improving earnings outlook. But this is just one factor that value investors are interested in.

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.

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.

BDX currently has a forward P/E ratio of 17.73, while MMSI has a forward P/E of 25.96. We also note that BDX has a PEG ratio of 2.02. 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. MMSI currently has a PEG ratio of 2.41.

Another notable valuation metric for BDX is its P/B ratio of 2.60. 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, MMSI has a P/B of 4.02.

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

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


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Becton, Dickinson and Company (BDX) - free report >>

Merit Medical Systems, Inc. (MMSI) - free report >>

Published in