IART vs. PEN: Which Stock Is the Better Value Option?
Investors interested in stocks from the Medical - Instruments sector have probably already heard of Integra LifeSciences (IART) and Penumbra (PEN). 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Integra LifeSciences has a Zacks Rank of #2 (Buy), while Penumbra has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that IART has an improving earnings outlook. 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 grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
IART currently has a forward P/E ratio of 6.62, while PEN has a forward P/E of 64.18. We also note that IART has a PEG ratio of 0.84. 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. PEN currently has a PEG ratio of 2.19.
Another notable valuation metric for IART is its P/B ratio of 1.21. 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, PEN has a P/B of 8.19.
These metrics, and several others, help IART earn a Value grade of B, while PEN has been given a Value grade of D.
IART sticks out from PEN in both our Zacks Rank and Style Scores models, so value investors will likely feel that IART is the better option right now.
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Penumbra, Inc. (PEN) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
