MMSI vs. WST: Which Stock Is the Better Value Option?
Investors interested in stocks from the Medical - Dental Supplies sector have probably already heard of Merit Medical (MMSI) and West Pharmaceutical Services (WST). 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Merit Medical and West Pharmaceutical Services are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that MMSI's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors.
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.
MMSI currently has a forward P/E ratio of 24.38, while WST has a forward P/E of 42.35. We also note that MMSI has a PEG ratio of 2.22. 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. WST currently has a PEG ratio of 2.81.
Another notable valuation metric for MMSI is its P/B ratio of 3.60. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, WST has a P/B of 8.44.
These are just a few of the metrics contributing to MMSI's Value grade of B and WST's Value grade of C.
MMSI sticks out from WST in both our Zacks Rank and Style Scores models, so value investors will likely feel that MMSI is the better option right now.
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Merit Medical Systems, Inc. (MMSI) : Free Stock Analysis Report
West Pharmaceutical Services, Inc. (WST) : Free Stock Analysis Report
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