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

    99,349.14
    +4,045.59 (+4.24%)
     

  • CMC Crypto 200

    1,372.49
    +59.87 (+4.56%)
     

  • 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%)
     

XRAY or CNMD: Which Is the Better Value Stock Right Now?

Zacks Equity Research
·2-min read

Investors looking for stocks in the Medical - Dental Supplies sector might want to consider either Dentsply International (XRAY) or Conmed (CNMD). But which of these two stocks presents investors with the better value opportunity right now? 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.

Currently, Dentsply International has a Zacks Rank of #2 (Buy), while Conmed has a Zacks Rank of #3 (Hold). This means that XRAY's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst 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.

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.

XRAY currently has a forward P/E ratio of 20.92, while CNMD has a forward P/E of 33.22. We also note that XRAY has a PEG ratio of 1.77. 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 2.21.

Another notable valuation metric for XRAY is its P/B ratio of 2.51. 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 4.18.

These metrics, and several others, help XRAY earn a Value grade of B, while CNMD has been given a Value grade of C.

XRAY has seen stronger estimate revision activity and sports more attractive valuation metrics than CNMD, so it seems like value investors will conclude that XRAY 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
 
DENTSPLY SIRONA Inc. (XRAY) : Free Stock Analysis Report
 
CONMED Corporation (CNMD) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research