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EHC or CHE: Which Is the Better Value Stock Right Now?
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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 offers value investors a better bang for their buck right now? We'll need to 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.
Encompass Health has a Zacks Rank of #2 (Buy), while Chemed has a Zacks Rank of #4 (Sell) right now. Investors should feel comfortable knowing that EHC likely has seen a stronger improvement to its earnings outlook than CHE has recently. But this is only part of the picture for value investors.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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 23.68, while CHE has a forward P/E of 23.70. We also note that EHC has a PEG ratio of 1.34. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. CHE currently has a PEG ratio of 2.15.
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 6.66.
These metrics, and several others, help EHC earn a Value grade of A, while CHE has been given a Value grade of C.
EHC stands above CHE thanks to its solid earnings outlook, and based on these valuation figures, we also feel that EHC is the superior value option right now.
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EHC or CHE: Which Is the Better Value Stock Right Now?
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 offers value investors a better bang for their buck right now? We'll need to 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.
Encompass Health has a Zacks Rank of #2 (Buy), while Chemed has a Zacks Rank of #4 (Sell) right now. Investors should feel comfortable knowing that EHC likely has seen a stronger improvement to its earnings outlook than CHE has recently. But this is only part of the picture for value investors.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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 23.68, while CHE has a forward P/E of 23.70. We also note that EHC has a PEG ratio of 1.34. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. CHE currently has a PEG ratio of 2.15.
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 6.66.
These metrics, and several others, help EHC earn a Value grade of A, while CHE has been given a Value grade of C.
EHC stands above CHE thanks to its solid earnings outlook, and based on these valuation figures, we also feel that EHC is the superior value option right now.