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

Zacks Equity Research

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 is more attractive to value investors? We'll need to take a closer look to find out.

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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Dentsply International and Conmed are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that XRAY has an improving earnings outlook. But this is only part of the picture for value investors.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.

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 21.62, while CNMD has a forward P/E of 36.63. We also note that XRAY has a PEG ratio of 1.86. 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. CNMD currently has a PEG ratio of 2.18.

Another notable valuation metric for XRAY is its P/B ratio of 2.24. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, CNMD has a P/B of 3.79.

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.


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DENTSPLY SIRONA Inc. (XRAY) : Free Stock Analysis Report
 
CONMED Corporation (CNMD) : Free Stock Analysis Report
 
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