Yahoo Finance HOLX vs. EW: Which Stock Should Value Investors Buy Now?
Investors looking for stocks in the Medical - Instruments sector might want to consider either Hologic (HOLX) or Edwards Lifesciences (EW). 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Hologic has a Zacks Rank of #2 (Buy), while Edwards Lifesciences has a Zacks Rank of #3 (Hold) right now. This means that HOLX'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 analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.
HOLX currently has a forward P/E ratio of 18.26, while EW has a forward P/E of 31.82. We also note that HOLX has a PEG ratio of 2.48. 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. EW currently has a PEG ratio of 3.22.
Another notable valuation metric for HOLX is its P/B ratio of 3.59. 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, EW has a P/B of 7.39.
These are just a few of the metrics contributing to HOLX's Value grade of B and EW's Value grade of D.
HOLX sticks out from EW in both our Zacks Rank and Style Scores models, so value investors will likely feel that HOLX is the better option right now.
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Hologic, Inc. (HOLX) : Free Stock Analysis Report
Edwards Lifesciences Corporation (EW) : Free Stock Analysis Report
