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Investors interested in Medical - Drugs stocks are likely familiar with Sandoz Group AG Sponsored ADR (SDZNY) and Zoetis (ZTS). 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.
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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, Sandoz Group AG Sponsored ADR is sporting a Zacks Rank of #2 (Buy), while Zoetis has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that SDZNY is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle 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.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
SDZNY currently has a forward P/E ratio of 12.25, while ZTS has a forward P/E of 25.58. We also note that SDZNY has a PEG ratio of 0.52. 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. ZTS currently has a PEG ratio of 2.51.
Another notable valuation metric for SDZNY is its P/B ratio of 2.05. 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, ZTS has a P/B of 14.14.
These are just a few of the metrics contributing to SDZNY's Value grade of A and ZTS's Value grade of C.
SDZNY sticks out from ZTS in both our Zacks Rank and Style Scores models, so value investors will likely feel that SDZNY is the better option right now.
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Sandoz Group AG Sponsored ADR (SDZNY) : Free Stock Analysis Report
Zoetis Inc. (ZTS) : Free Stock Analysis Report