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LLY vs. NVO: Which Stock Is the Better Value Option?
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Investors interested in Large Cap Pharmaceuticals stocks are likely familiar with Eli Lilly (LLY - Free Report) and Novo Nordisk (NVO - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's 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, Eli Lilly is sporting a Zacks Rank of #2 (Buy), while Novo Nordisk has a Zacks Rank of #4 (Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that LLY is likely seeing its earnings outlook improve to a greater extent. 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.
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.
LLY currently has a forward P/E ratio of 17.46, while NVO has a forward P/E of 19.97. We also note that LLY has a PEG ratio of 1.54. 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. NVO currently has a PEG ratio of 2.64.
Another notable valuation metric for LLY is its P/B ratio of 6.70. 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, NVO has a P/B of 16.80.
These metrics, and several others, help LLY earn a Value grade of B, while NVO has been given a Value grade of C.
LLY 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 LLY is likely the superior value option right now.
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LLY vs. NVO: Which Stock Is the Better Value Option?
Investors interested in Large Cap Pharmaceuticals stocks are likely familiar with Eli Lilly (LLY - Free Report) and Novo Nordisk (NVO - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's 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, Eli Lilly is sporting a Zacks Rank of #2 (Buy), while Novo Nordisk has a Zacks Rank of #4 (Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that LLY is likely seeing its earnings outlook improve to a greater extent. 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.
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.
LLY currently has a forward P/E ratio of 17.46, while NVO has a forward P/E of 19.97. We also note that LLY has a PEG ratio of 1.54. 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. NVO currently has a PEG ratio of 2.64.
Another notable valuation metric for LLY is its P/B ratio of 6.70. 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, NVO has a P/B of 16.80.
These metrics, and several others, help LLY earn a Value grade of B, while NVO has been given a Value grade of C.
LLY 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 LLY is likely the superior value option right now.