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PDCO vs. CNMD: Which Stock Is the Better Value Option?

PDCO vs. CNMD: Which Stock Is the Better Value Option?

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This story originally appeared on Zacks

Investors interested in Medical - Dental Supplies stocks are likely familiar with Patterson Cos. (PDCO) and Conmed (CNMD). 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.

- Zacks

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. 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, Patterson Cos. has a Zacks Rank of #2 (Buy), while Conmed has a Zacks Rank of #3 (Hold). This means that PDCO's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.

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 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.

PDCO currently has a forward P/E ratio of 14.43, while CNMD has a forward P/E of 40.38. We also note that PDCO has a PEG ratio of 1.45. 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. CNMD currently has a PEG ratio of 3.26.

Another notable valuation metric for PDCO is its P/B ratio of 2.88. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, CNMD has a P/B of 5.81.

These are just a few of the metrics contributing to PDCO's Value grade of B and CNMD's Value grade of C.

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



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Patterson Companies, Inc. (PDCO): Free Stock Analysis Report

 

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