GMED vs. ITGR: Which Stock Is the Better Value Option?
Investors interested in Medical - Instruments stocks are likely familiar with Globus Medical (GMED) and Integer (ITGR). 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.
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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, Globus Medical has a Zacks Rank of #1 (Strong Buy), while Integer has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that GMED is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks 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.
GMED currently has a forward P/E ratio of 15.18, while ITGR has a forward P/E of 20.74. We also note that GMED has a PEG ratio of 1.22. 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. ITGR currently has a PEG ratio of 2.40.
Another notable valuation metric for GMED is its P/B ratio of 2.13. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, ITGR has a P/B of 2.5.
These metrics, and several others, help GMED earn a Value grade of B, while ITGR has been given a Value grade of C.
GMED 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 GMED is likely the superior value option right now.
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Integer Holdings Corporation (ITGR) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
