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BDX vs. MMSI: Which Stock Should Value Investors Buy Now?

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Investors interested in Medical - Dental Supplies stocks are likely familiar with Becton Dickinson (BDX - Free Report) and Merit Medical (MMSI - 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.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great 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.

Becton Dickinson and Merit Medical are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that BDX likely has seen a stronger improvement to its earnings outlook than MMSI 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 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.

BDX currently has a forward P/E ratio of 13.03, while MMSI has a forward P/E of 23.56. We also note that BDX has a PEG ratio of 1.51. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. MMSI currently has a PEG ratio of 2.42.

Another notable valuation metric for BDX is its P/B ratio of 2.1. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, MMSI has a P/B of 3.4.

These are just a few of the metrics contributing to BDX's Value grade of B and MMSI's Value grade of C.

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


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