TMO or IDXX: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Medical - Instruments sector might want to consider either Thermo Fisher Scientific (TMO) or Idexx Laboratories (IDXX). But which of these two companies is the best option for those looking for undervalued stocks? 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Both Thermo Fisher Scientific and Idexx Laboratories have a Zacks Rank of # 2 (Buy) right now. This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. However, value investors will care about much more than just this.
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.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
TMO currently has a forward P/E ratio of 23.14, while IDXX has a forward P/E of 49.70. We also note that TMO has a PEG ratio of 1.85. 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. IDXX currently has a PEG ratio of 2.76.
Another notable valuation metric for TMO is its P/B ratio of 4.89. 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, IDXX has a P/B of 64.49.
Based on these metrics and many more, TMO holds a Value grade of B, while IDXX has a Value grade of C.
Both TMO and IDXX are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that TMO is the superior value option right now.
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Thermo Fisher Scientific Inc. (TMO) : Free Stock Analysis Report
IDEXX Laboratories, Inc. (IDXX) : Free Stock Analysis Report
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