Which stock currently offers the better value?

Investors looking for medical device stocks should consider either Hologic (HOLX) or Edwards Lifesciences (EW). But which of these two stocks currently offers value investors the better value for money? We need to take a closer look.

The best way to find great value stocks is to combine a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank highlights companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, Hologic has a Zacks Rank of #2 (Buy), while Edwards Lifesciences has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive earnings estimate revisions, so investors can be confident that HOLX has an improving earnings outlook. But that’s only one piece of the puzzle for value investors.

Value investors are also interested in a number of proven valuation metrics that show when a company is undervalued at its current share price level.

The Style Score Value assessment incorporates a number of important fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and numerous other key statistics commonly used by value investors.

HOLX currently has a forward P/E ratio of 18.75, while EW has a forward P/E ratio of 33.53. We also note that HOLX has a PEG ratio of 2.55. This figure is similar to the commonly used P/E ratio, with the PEG ratio also taking into account a company’s expected earnings growth rate. EW currently has a PEG ratio of 3.40.

Another important valuation metric for HOLX is its P/B ratio of 3.68. 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. For comparison, EW has a P/B ratio of 7.79.

These and several other metrics help HOLX to achieve a B rating, while EW receives a D rating.

HOLX has seen more estimate revision activity and has more attractive valuation multiples than EW. Therefore, value investors seem to conclude that HOLX is the better option at present.

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Hologic, Inc. (HOLX): Free Stock Analysis Report

Edwards Lifesciences Corporation (EW): Free Stock Analysis Report

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