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ASRT vs. ZTS: Which Stock Is the Better Value Option?

Zacks Equity Research

Investors looking for stocks in the Medical - Drugs sector might want to consider either Assertio (ASRT) or Zoetis (ZTS). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Currently, both Assertio and Zoetis 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 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.

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The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

ASRT currently has a forward P/E ratio of 1.48, while ZTS has a forward P/E of 34.82. We also note that ASRT has a PEG ratio of 0.07. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. ZTS currently has a PEG ratio of 3.14.

Another notable valuation metric for ASRT is its P/B ratio of 0.43. 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, ZTS has a P/B of 24.67.

These are just a few of the metrics contributing to ASRT's Value grade of A and ZTS's Value grade of C.

Both ASRT and ZTS are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that ASRT is the superior value option right now.


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ASSERTIO THERAPEUTICS, INC (ASRT) : Free Stock Analysis Report
 
Zoetis Inc. (ZTS) : Free Stock Analysis Report
 
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Zacks Investment Research