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Investors with an interest in Medical - Dental Supplies stocks have likely encountered both Align Technology (ALGN) and Straumann Holding AG (SAUHY). But which of these two stocks presents investors with the better value opportunity right now? 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 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.
Currently, both Align Technology and Straumann Holding AG are holding a Zacks Rank of # 2 (Buy). 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 just one factor that value investors are interested in.
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 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.
ALGN currently has a forward P/E ratio of 17.23, while SAUHY has a forward P/E of 29.68. We also note that ALGN has a PEG ratio of 1.54. 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. SAUHY currently has a PEG ratio of 1.98.
Another notable valuation metric for ALGN is its P/B ratio of 3.43. 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, SAUHY has a P/B of 8.61.
These metrics, and several others, help ALGN earn a Value grade of B, while SAUHY has been given a Value grade of C.
Both ALGN and SAUHY are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that ALGN is the superior value option right now.
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Align Technology, Inc. (ALGN) : Free Stock Analysis Report
Straumann Holding AG (SAUHY) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).