Advertisement
Australia markets closed
  • ALL ORDS

    7,817.40
    -81.50 (-1.03%)
     
  • ASX 200

    7,567.30
    -74.80 (-0.98%)
     
  • AUD/USD

    0.6421
    -0.0004 (-0.07%)
     
  • OIL

    83.24
    +0.51 (+0.62%)
     
  • GOLD

    2,406.70
    +8.70 (+0.36%)
     
  • Bitcoin AUD

    100,034.59
    +151.83 (+0.15%)
     
  • CMC Crypto 200

    1,371.97
    +59.34 (+4.52%)
     
  • AUD/EUR

    0.6023
    -0.0008 (-0.13%)
     
  • AUD/NZD

    1.0893
    +0.0018 (+0.17%)
     
  • NZX 50

    11,796.21
    -39.83 (-0.34%)
     
  • NASDAQ

    17,037.65
    -356.67 (-2.05%)
     
  • FTSE

    7,895.85
    +18.80 (+0.24%)
     
  • Dow Jones

    37,986.40
    +211.02 (+0.56%)
     
  • DAX

    17,737.36
    -100.04 (-0.56%)
     
  • Hang Seng

    16,224.14
    -161.73 (-0.99%)
     
  • NIKKEI 225

    37,068.35
    -1,011.35 (-2.66%)
     

GRFS or ZTS: Which Is the Better Value Stock Right Now?

Investors with an interest in Medical - Drugs stocks have likely encountered both Grifols (GRFS) and Zoetis (ZTS). 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.

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.

Grifols has a Zacks Rank of #2 (Buy), while Zoetis has a Zacks Rank of #3 (Hold) right now. This means that GRFS'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 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.

ADVERTISEMENT

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.

GRFS currently has a forward P/E ratio of 7.20, while ZTS has a forward P/E of 30.88. We also note that GRFS has a PEG ratio of 0.22. 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. ZTS currently has a PEG ratio of 2.70.

Another notable valuation metric for GRFS is its P/B ratio of 0.62. 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 16.60.

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

GRFS has seen stronger estimate revision activity and sports more attractive valuation metrics than ZTS, so it seems like value investors will conclude that GRFS is the superior 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

Grifols, S.A. (GRFS) : Free Stock Analysis Report

Zoetis Inc. (ZTS) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research