Investors interested in stocks from the Medical - Outpatient and Home Healthcare sector have probably already heard of Addus HomeCare (ADUS) and U.S. Physical Therapy (USPH). 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, Addus HomeCare has a Zacks Rank of #2 (Buy), while U.S. Physical Therapy has a Zacks Rank of #5 (Strong Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that ADUS is likely seeing its earnings outlook improve to a greater extent. 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.

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.

ADUS currently has a forward P/E ratio of 24.21, while USPH has a forward P/E of 32.24. We also note that ADUS has a PEG ratio of 2. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. USPH currently has a PEG ratio of 3.97.

Another notable valuation metric for ADUS is its P/B ratio of 2.48. 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, USPH has a P/B of 2.51.

These metrics, and several others, help ADUS earn a Value grade of B, while USPH has been given a Value grade of D.

ADUS is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that ADUS is likely the superior value option right now.

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Addus HomeCare Corporation (ADUS) : Free Stock Analysis Report