Yahoo Finance TMO vs. IDXX: Which Stock Is the Better Value Option?
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 stocks offers value investors a better bang for their buck right now? We'll need to 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 is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Both Thermo Fisher Scientific and Idexx Laboratories have a Zacks Rank of # 2 (Buy) right now. Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. But this is only part of the picture for value investors.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
TMO currently has a forward P/E ratio of 25.42, while IDXX has a forward P/E of 42.90. We also note that TMO has a PEG ratio of 2.30. 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. IDXX currently has a PEG ratio of 3.68.
Another notable valuation metric for TMO is its P/B ratio of 4.53. 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, IDXX has a P/B of 26.75.
These metrics, and several others, help TMO earn a Value grade of B, while IDXX has been given 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
