SDZNY or ZTS: Which Is the Better Value Stock Right Now?
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Investors with an interest in Medical - Drugs stocks have likely encountered both Sandoz Group AG Sponsored ADR (SDZNY) and Zoetis (ZTS). But which of these two stocks presents investors with the better value opportunity right now? Let's 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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Sandoz Group AG Sponsored ADR and Zoetis are both sporting a Zacks Rank of # 2 (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 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.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
SDZNY currently has a forward P/E ratio of 15.88, while ZTS has a forward P/E of 33.43. We also note that SDZNY has a PEG ratio of 0.71. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. ZTS currently has a PEG ratio of 2.99.
Another notable valuation metric for SDZNY is its P/B ratio of 2.08. 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 17.92.
These are just a few of the metrics contributing to SDZNY's Value grade of A and ZTS's Value grade of C.
Both SDZNY and ZTS are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that SDZNY is the superior value option right now.
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Sandoz Group AG Sponsored ADR (SDZNY) : Free Stock Analysis Report
Zoetis Inc. (ZTS) : Free Stock Analysis Report