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PHG or ESLOY: Which Is the Better Value Stock Right Now?

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Investors looking for stocks in the Medical - Products sector might want to consider either Royal Philips (PHG - Free Report) or EssilorLuxottica Unsponsored ADR (ESLOY - 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.

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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Royal Philips has a Zacks Rank of #2 (Buy), while EssilorLuxottica Unsponsored ADR has a Zacks Rank of #4 (Sell) right now. Investors should feel comfortable knowing that PHG likely has seen a stronger improvement to its earnings outlook than ESLOY has recently. But this is just one piece of the puzzle 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.

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.

PHG currently has a forward P/E ratio of 20.10, while ESLOY has a forward P/E of 31.46. We also note that PHG has a PEG ratio of 1.04. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. ESLOY currently has a PEG ratio of 3.49.

Another notable valuation metric for PHG is its P/B ratio of 2.21. 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, ESLOY has a P/B of 2.49.

These are just a few of the metrics contributing to PHG's Value grade of A and ESLOY's Value grade of D.

PHG stands above ESLOY thanks to its solid earnings outlook, and based on these valuation figures, we also feel that PHG is the superior value option right now.


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Koninklijke Philips N.V. (PHG) - free report >>

EssilorLuxottica Unsponsored ADR (ESLOY) - free report >>

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