PDCO vs. CNMD: Which Stock Is the Better Value Option?
Investors interested in stocks from the Medical - Dental Supplies sector have probably already heard of Patterson Cos. (PDCO) and Conmed (CNMD). But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 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.
Currently, Patterson Cos. has a Zacks Rank of #1 (Strong Buy), while Conmed has a Zacks Rank of #4 (Sell). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that PDCO has an improving earnings outlook. 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 Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
PDCO currently has a forward P/E ratio of 19.06, while CNMD has a forward P/E of 430.82. We also note that PDCO has a PEG ratio of 2.80. 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. CNMD currently has a PEG ratio of 49.52.
Another notable valuation metric for PDCO is its P/B ratio of 2.95. 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, CNMD has a P/B of 3.22.
These metrics, and several others, help PDCO earn a Value grade of A, while CNMD has been given a Value grade of D.
PDCO 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 PDCO is likely the superior value option right now.
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CONMED Corporation (CNMD): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.