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Investors interested in Medical - Dental Supplies stocks are likely familiar with Becton Dickinson (BDX) and Merit Medical (MMSI). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, both Becton Dickinson and Merit Medical are holding a Zacks Rank of # 2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. However, value investors will care about much more than just this.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks 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.
BDX currently has a forward P/E ratio of 15.73, while MMSI has a forward P/E of 28.80. We also note that BDX has a PEG ratio of 1.64. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. MMSI currently has a PEG ratio of 2.40.
Another notable valuation metric for BDX is its P/B ratio of 2.53. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, MMSI has a P/B of 4.26.
These metrics, and several others, help BDX earn a Value grade of B, while MMSI has been given a Value grade of C.
Both BDX and MMSI are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that BDX is the superior value option right now.
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Becton, Dickinson and Company (BDX) : Free Stock Analysis Report
Merit Medical Systems, Inc. (MMSI) : Free Stock Analysis Report