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ABC vs. WST: Which Stock Is the Better Value Option?
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Investors interested in stocks from the Medical - Dental Supplies sector have probably already heard of AmerisourceBergen and West Pharmaceutical Services (WST - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? 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 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, AmerisourceBergen is sporting a Zacks Rank of #2 (Buy), while West Pharmaceutical Services has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that ABC is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.
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.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
ABC currently has a forward P/E ratio of 12.45, while WST has a forward P/E of 46.92. We also note that ABC has a PEG ratio of 1.68. 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. WST currently has a PEG ratio of 3.35.
Another notable valuation metric for ABC is its P/B ratio of 6.42. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, WST has a P/B of 8.07.
These metrics, and several others, help ABC earn a Value grade of A, while WST has been given a Value grade of D.
ABC sticks out from WST in both our Zacks Rank and Style Scores models, so value investors will likely feel that ABC is the better option right now.
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ABC vs. WST: Which Stock Is the Better Value Option?
Investors interested in stocks from the Medical - Dental Supplies sector have probably already heard of AmerisourceBergen and West Pharmaceutical Services (WST - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? 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 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, AmerisourceBergen is sporting a Zacks Rank of #2 (Buy), while West Pharmaceutical Services has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that ABC is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.
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.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
ABC currently has a forward P/E ratio of 12.45, while WST has a forward P/E of 46.92. We also note that ABC has a PEG ratio of 1.68. 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. WST currently has a PEG ratio of 3.35.
Another notable valuation metric for ABC is its P/B ratio of 6.42. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, WST has a P/B of 8.07.
These metrics, and several others, help ABC earn a Value grade of A, while WST has been given a Value grade of D.
ABC sticks out from WST in both our Zacks Rank and Style Scores models, so value investors will likely feel that ABC is the better option right now.