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PFE vs. RHHBY: Which Stock Should Value Investors Buy Now?

PFE vs. RHHBY: Which Stock Is the Better Value Option?

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This story originally appeared on Zacks

Investors interested in Large Cap Pharmaceuticals stocks are likely familiar with Pfizer (PFE) and Roche Holding AG (RHHBY). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

- Zacks

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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, Pfizer is sporting a Zacks Rank of #1 (Strong Buy), while Roche Holding AG has a Zacks Rank of #3 (Hold). 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 only part of the picture for value investors.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.

PFE currently has a forward P/E ratio of 10.29, while RHHBY has a forward P/E of 18.19. We also note that PFE has a PEG ratio of 0.97. 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. RHHBY currently has a PEG ratio of 2.50.

Another notable valuation metric for PFE is its P/B ratio of 4.18. 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, RHHBY has a P/B of 7.98.

Based on these metrics and many more, PFE holds a Value grade of B, while RHHBY has a Value grade of C.

PFE sticks out from RHHBY in both our Zacks Rank and Style Scores models, so value investors will likely feel that PFE is the better option right now.



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Pfizer Inc. (PFE): Free Stock Analysis Report

 

Roche Holding AG (RHHBY): Free Stock Analysis Report

 

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