Yahoo Finance BDX vs. WST: Which Stock Is the Better Value Option?
Investors with an interest in Medical - Dental Supplies stocks have likely encountered both Becton Dickinson (BDX) and West Pharmaceutical Services (WST). 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Becton Dickinson has a Zacks Rank of #2 (Buy), while West Pharmaceutical Services has a Zacks Rank of #3 (Hold) right now. This means that BDX's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. 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.
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 20.68, while WST has a forward P/E of 36.98. We also note that BDX has a PEG ratio of 2.17. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. WST currently has a PEG ratio of 2.46.
Another notable valuation metric for BDX is its P/B ratio of 2.79. 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 8.04.
These metrics, and several others, help BDX earn a Value grade of B, while WST has been given a Value grade of C.
BDX has seen stronger estimate revision activity and sports more attractive valuation metrics than WST, so it seems like value investors will conclude that BDX is the superior option right now.
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Becton, Dickinson and Company (BDX) : Free Stock Analysis Report
West Pharmaceutical Services, Inc. (WST) : Free Stock Analysis Report
