Advertisement
New Zealand Markets open in 35 mins
  • NZX 50

    11,678.68
    -3.82 (-0.03%)
     
  • NZD/USD

    0.6115
    -0.0037 (-0.5992%)
     
  • ALL ORDS

    7,935.70
    -99.20 (-1.23%)
     
  • OIL

    79.28
    -0.55 (-0.69%)
     
  • GOLD

    2,336.90
    -19.60 (-0.83%)
     

BDX or ALGN: Which Is the Better Value Stock Right Now?

Investors interested in Medical - Dental Supplies stocks are likely familiar with Becton Dickinson (BDX) and Align Technology (ALGN). But which of these two companies is the best option for those looking for undervalued stocks? Let's 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.

Becton Dickinson and Align Technology are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that BDX has an improving earnings outlook. But this is only part of the picture for value investors.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.

ADVERTISEMENT

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.

BDX currently has a forward P/E ratio of 19.54, while ALGN has a forward P/E of 41.95. We also note that BDX has a PEG ratio of 2.51. 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. ALGN currently has a PEG ratio of 2.63.

Another notable valuation metric for BDX is its P/B ratio of 2.64. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, ALGN has a P/B of 7.26.

Based on these metrics and many more, BDX holds a Value grade of B, while ALGN has a Value grade of C.

BDX has seen stronger estimate revision activity and sports more attractive valuation metrics than ALGN, so it seems like value investors will conclude that BDX is the superior option right now.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Becton, Dickinson and Company (BDX) : Free Stock Analysis Report

Align Technology, Inc. (ALGN) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research