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PBH vs. BSX: Which Stock Is the Better Value Option?

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Investors looking for stocks in the Medical - Products sector might want to consider either Prestige Consumer Healthcare (PBH - Free Report) or Boston Scientific (BSX - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? 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.

Prestige Consumer Healthcare and Boston Scientific are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that PBH likely has seen a stronger improvement to its earnings outlook than BSX has recently. But this is just one piece of the puzzle for value investors.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.

PBH currently has a forward P/E ratio of 17.59, while BSX has a forward P/E of 37.20. We also note that PBH has a PEG ratio of 2.20. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. BSX currently has a PEG ratio of 2.70.

Another notable valuation metric for PBH is its P/B ratio of 2.24. 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, BSX has a P/B of 7.25.

These metrics, and several others, help PBH earn a Value grade of B, while BSX has been given a Value grade of D.

PBH stands above BSX thanks to its solid earnings outlook, and based on these valuation figures, we also feel that PBH is the superior value option right now.


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