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PAHC vs. BSX: Which Stock Should Value Investors Buy Now?
Investors with an interest in Medical - Products stocks have likely encountered both Phibro Animal Health (PAHC - Free Report) and Boston Scientific (BSX - 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.
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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Phibro Animal Health has a Zacks Rank of #1 (Strong Buy), while Boston Scientific has a Zacks Rank of #2 (Buy) right now. This means that PAHC's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst 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 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.
PAHC currently has a forward P/E ratio of 10.60, while BSX has a forward P/E of 33.48. We also note that PAHC has a PEG ratio of 0.41. 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. BSX currently has a PEG ratio of 2.52.
Another notable valuation metric for PAHC is its P/B ratio of 3.36. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, BSX has a P/B of 6.39.
Based on these metrics and many more, PAHC holds a Value grade of A, while BSX has a Value grade of D.
PAHC has seen stronger estimate revision activity and sports more attractive valuation metrics than BSX, so it seems like value investors will conclude that PAHC is the superior option right now.