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BMY or VRTX: Which Is the Better Value Stock Right Now?
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Investors with an interest in Medical - Biomedical and Genetics stocks have likely encountered both Bristol Myers Squibb (BMY - Free Report) and Vertex Pharmaceuticals (VRTX - Free Report) . 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.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive 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.
Bristol Myers Squibb and Vertex Pharmaceuticals are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that BMY's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies 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.
BMY currently has a forward P/E ratio of 70.56, while VRTX has a forward P/E of 7,711.13. We also note that BMY has a PEG ratio of 14.11. 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. VRTX currently has a PEG ratio of 582.19.
Another notable valuation metric for BMY is its P/B ratio of 6.19. 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, VRTX has a P/B of 8.35.
These are just a few of the metrics contributing to BMY's Value grade of A and VRTX's Value grade of D.
BMY 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 BMY is likely the superior value option right now.
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BMY or VRTX: Which Is the Better Value Stock Right Now?
Investors with an interest in Medical - Biomedical and Genetics stocks have likely encountered both Bristol Myers Squibb (BMY - Free Report) and Vertex Pharmaceuticals (VRTX - Free Report) . 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.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive 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.
Bristol Myers Squibb and Vertex Pharmaceuticals are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that BMY's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies 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.
BMY currently has a forward P/E ratio of 70.56, while VRTX has a forward P/E of 7,711.13. We also note that BMY has a PEG ratio of 14.11. 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. VRTX currently has a PEG ratio of 582.19.
Another notable valuation metric for BMY is its P/B ratio of 6.19. 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, VRTX has a P/B of 8.35.
These are just a few of the metrics contributing to BMY's Value grade of A and VRTX's Value grade of D.
BMY 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 BMY is likely the superior value option right now.