PFE vs. LLY: Which Stock Should Value Investors Buy Now?
PFE vs. LLY: Which Stock Is the Better Value Option?
Investors interested in Large Cap Pharmaceuticals stocks are likely familiar with Pfizer (PFE) and Eli Lilly (LLY). 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.
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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Pfizer has a Zacks Rank of #2 (Buy), while Eli Lilly 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 PFE has an improving earnings outlook. But this is just one piece of the puzzle for value investors.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies 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.
PFE currently has a forward P/E ratio of 11.09, while LLY has a forward P/E of 32.38. We also note that PFE has a PEG ratio of 1.63. 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. LLY currently has a PEG ratio of 2.05.
Another notable valuation metric for PFE is its P/B ratio of 3.62. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, LLY has a P/B of 30.89.
These are just a few of the metrics contributing to PFE's Value grade of A and LLY's Value grade of C.
PFE stands above LLY thanks to its solid earnings outlook, and based on these valuation figures, we also feel that PFE is the superior value option right now.
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Pfizer Inc. (PFE): Free Stock Analysis Report
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