Yahoo Finance SDZNY vs. ZTS: Which Stock Is the Better Value Option?
Investors with an interest in Medical - Drugs stocks have likely encountered both Sandoz Group AG Sponsored ADR (SDZNY) and Zoetis (ZTS). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, Sandoz Group AG Sponsored ADR has a Zacks Rank of #2 (Buy), while Zoetis 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 SDZNY is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.
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 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.
SDZNY currently has a forward P/E ratio of 15.72, while ZTS has a forward P/E of 32.73. We also note that SDZNY has a PEG ratio of 0.70. 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. ZTS currently has a PEG ratio of 2.93.
Another notable valuation metric for SDZNY is its P/B ratio of 2.06. 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, ZTS has a P/B of 17.54.
Based on these metrics and many more, SDZNY holds a Value grade of A, while ZTS has a Value grade of C.
SDZNY stands above ZTS thanks to its solid earnings outlook, and based on these valuation figures, we also feel that SDZNY is the superior value option right now.
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Sandoz Group AG Sponsored ADR (SDZNY) : Free Stock Analysis Report
Zoetis Inc. (ZTS) : Free Stock Analysis Report
