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VREX vs. ESLOY: Which Stock Should Value Investors Buy Now?

Investors interested in Medical - Products stocks are likely familiar with VAREX IMAGING (VREX) and EssilorLuxottica Unsponsored ADR (ESLOY). But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Both VAREX IMAGING and EssilorLuxottica Unsponsored ADR have a Zacks Rank of # 1 (Strong Buy) right now. Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. 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.

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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.

VREX currently has a forward P/E ratio of 18.93, while ESLOY has a forward P/E of 26.15. We also note that VREX has a PEG ratio of 0.63. 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. ESLOY currently has a PEG ratio of 3.31.

Another notable valuation metric for VREX is its P/B ratio of 1.68. 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, ESLOY has a P/B of 2.02.

These are just a few of the metrics contributing to VREX's Value grade of B and ESLOY's Value grade of D.

Both VREX and ESLOY are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that VREX 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

VAREX IMAGING (VREX) : Free Stock Analysis Report

EssilorLuxottica Unsponsored ADR (ESLOY) : Free Stock Analysis Report

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Zacks Investment Research