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PFE vs. NVO: Which Stock Is the Better Value Option?
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Investors interested in stocks from the Large Cap Pharmaceuticals sector have probably already heard of Pfizer (PFE - Free Report) and Novo Nordisk (NVO - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's 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.
Pfizer has a Zacks Rank of #2 (Buy), while Novo Nordisk has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that PFE has an improving earnings outlook. But this is only part of the picture for value investors.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
PFE currently has a forward P/E ratio of 11.04, while NVO has a forward P/E of 40.02. We also note that PFE has a PEG ratio of 1.27. 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. NVO currently has a PEG ratio of 1.36.
Another notable valuation metric for PFE is its P/B ratio of 1.87. 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, NVO has a P/B of 34.35.
These metrics, and several others, help PFE earn a Value grade of B, while NVO has been given a Value grade of C.
PFE sticks out from NVO in both our Zacks Rank and Style Scores models, so value investors will likely feel that PFE is the better option right now.
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PFE vs. NVO: Which Stock Is the Better Value Option?
Investors interested in stocks from the Large Cap Pharmaceuticals sector have probably already heard of Pfizer (PFE - Free Report) and Novo Nordisk (NVO - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's 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.
Pfizer has a Zacks Rank of #2 (Buy), while Novo Nordisk has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that PFE has an improving earnings outlook. But this is only part of the picture for value investors.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
PFE currently has a forward P/E ratio of 11.04, while NVO has a forward P/E of 40.02. We also note that PFE has a PEG ratio of 1.27. 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. NVO currently has a PEG ratio of 1.36.
Another notable valuation metric for PFE is its P/B ratio of 1.87. 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, NVO has a P/B of 34.35.
These metrics, and several others, help PFE earn a Value grade of B, while NVO has been given a Value grade of C.
PFE sticks out from NVO in both our Zacks Rank and Style Scores models, so value investors will likely feel that PFE is the better option right now.