PAHC vs. SYK: Which Stock Should Value Investors Buy Now?

Zacks
25 Jan

Investors interested in stocks from the Medical - Products sector have probably already heard of Phibro Animal Health (PAHC) and Stryker (SYK). But which of these two stocks presents investors with the better value opportunity right now? Let's 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.

Phibro Animal Health has a Zacks Rank of #2 (Buy), while Stryker has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that PAHC has an improving earnings outlook. But this is only part of the picture for value investors.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether 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.

PAHC currently has a forward P/E ratio of 13.50, while SYK has a forward P/E of 29.11. We also note that PAHC has a PEG ratio of 0.56. 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. SYK currently has a PEG ratio of 2.70.

Another notable valuation metric for PAHC is its P/B ratio of 3.43. 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, SYK has a P/B of 7.45.

These are just a few of the metrics contributing to PAHC's Value grade of A and SYK's Value grade of D.

PAHC has seen stronger estimate revision activity and sports more attractive valuation metrics than SYK, so it seems like value investors will conclude that PAHC is the superior option right now.

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Phibro Animal Health Corporation (PAHC) : Free Stock Analysis Report

Stryker Corporation (SYK) : Free Stock Analysis Report

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Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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