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

Investors interested in Medical - Dental Supplies stocks are likely familiar with The Cooper Companies (COO) and Merit Medical (MMSI). But which of these two companies is the best option for those looking for undervalued stocks? 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 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.

Right now, The Cooper Companies is sporting a Zacks Rank of #2 (Buy), while Merit Medical has a Zacks Rank of #4 (Sell). Investors should feel comfortable knowing that COO likely has seen a stronger improvement to its earnings outlook than MMSI has recently. 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 Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

COO currently has a forward P/E ratio of 16.12, while MMSI has a forward P/E of 20.91. We also note that COO has a PEG ratio of 1.95. 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. MMSI currently has a PEG ratio of 2.00.

Another notable valuation metric for COO is its P/B ratio of 1.77. 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, MMSI has a P/B of 3.05.

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

COO sticks out from MMSI in both our Zacks Rank and Style Scores models, so value investors will likely feel that COO is the better option right now.

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This article originally published on Zacks Investment Research (zacks.com).

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