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PDCO vs. COO: Which Stock Should Value Investors Buy Now?

Investors with an interest in Medical - Dental Supplies stocks have likely encountered both Patterson Cos. (PDCO) and Cooper Cos. (COO). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Currently, Patterson Cos. has a Zacks Rank of #2 (Buy), while Cooper Cos. has a Zacks Rank of #4 (Sell). Investors should feel comfortable knowing that PDCO likely has seen a stronger improvement to its earnings outlook than COO has recently. But this is only part of the picture for value investors.

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.

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.

PDCO currently has a forward P/E ratio of 20.47, while COO has a forward P/E of 35.14. We also note that PDCO has a PEG ratio of 2.16. 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. COO currently has a PEG ratio of 3.19.

Another notable valuation metric for PDCO is its P/B ratio of 3.19. 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, COO has a P/B of 4.37.

These metrics, and several others, help PDCO earn a Value grade of A, while COO has been given a Value grade of C.

PDCO sticks out from COO in both our Zacks Rank and Style Scores models, so value investors will likely feel that PDCO is the better option right now.


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Patterson Companies, Inc. (PDCO): Free Stock Analysis Report

The Cooper Companies, Inc. (COO): 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.

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