Yahoo Finance PHG vs. HAE: Which Stock Is the Better Value Option?
Investors interested in stocks from the Medical - Products sector have probably already heard of Royal Philips (PHG) and Haemonetics (HAE). 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Royal Philips has a Zacks Rank of #2 (Buy), while Haemonetics has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that PHG likely has seen a stronger improvement to its earnings outlook than HAE has recently. But this is just one piece of the puzzle 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.
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.
PHG currently has a forward P/E ratio of 17.18, while HAE has a forward P/E of 22.45. We also note that PHG has a PEG ratio of 1.36. 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. HAE currently has a PEG ratio of 2.25.
Another notable valuation metric for PHG is its P/B ratio of 1.89. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, HAE has a P/B of 5.12.
These are just a few of the metrics contributing to PHG's Value grade of A and HAE's Value grade of C.
PHG stands above HAE thanks to its solid earnings outlook, and based on these valuation figures, we also feel that PHG is the superior value option right now.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Koninklijke Philips N.V. (PHG) : Free Stock Analysis Report
Haemonetics Corporation (HAE) : Free Stock Analysis Report
