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EHC vs. CHE: Which Stock Is the Better Value Option?
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Investors interested in stocks from the Medical - Outpatient and Home Healthcare sector have probably already heard of Encompass Health (EHC - Free Report) and Chemed (CHE - Free Report) . 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Encompass Health and Chemed are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. This means that EHC'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 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 highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
EHC currently has a forward P/E ratio of 23.64, while CHE has a forward P/E of 24.73. We also note that EHC has a PEG ratio of 1.34. 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. CHE currently has a PEG ratio of 2.25.
Another notable valuation metric for EHC is its P/B ratio of 3.82. 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, CHE has a P/B of 6.95.
Based on these metrics and many more, EHC holds a Value grade of A, while CHE has a Value grade of C.
EHC sticks out from CHE in both our Zacks Rank and Style Scores models, so value investors will likely feel that EHC is the better option right now.
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EHC vs. CHE: Which Stock Is the Better Value Option?
Investors interested in stocks from the Medical - Outpatient and Home Healthcare sector have probably already heard of Encompass Health (EHC - Free Report) and Chemed (CHE - Free Report) . 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Encompass Health and Chemed are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. This means that EHC'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 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 highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
EHC currently has a forward P/E ratio of 23.64, while CHE has a forward P/E of 24.73. We also note that EHC has a PEG ratio of 1.34. 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. CHE currently has a PEG ratio of 2.25.
Another notable valuation metric for EHC is its P/B ratio of 3.82. 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, CHE has a P/B of 6.95.
Based on these metrics and many more, EHC holds a Value grade of A, while CHE has a Value grade of C.
EHC sticks out from CHE in both our Zacks Rank and Style Scores models, so value investors will likely feel that EHC is the better option right now.