NVST or ABT: Which Is the Better Value Stock Right Now?

Investors interested in Medical - Products stocks are likely familiar with Envista (NVST) and Abbott (ABT). But which of these two stocks presents investors with the better value opportunity right now? Let's 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 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.

Envista and Abbott are sporting Zacks Ranks of #1 (Strong Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that NVST has an improving earnings outlook. But this is just one piece of the puzzle for value investors.

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.

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.

NVST currently has a forward P/E ratio of 17.78, while ABT has a forward P/E of 21.13. We also note that NVST has a PEG ratio of 1.30. 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. ABT currently has a PEG ratio of 2.26.

Another notable valuation metric for NVST is its P/B ratio of 1.44. 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, ABT has a P/B of 3.9.

Based on these metrics and many more, NVST holds a Value grade of B, while ABT has a Value grade of C.

NVST is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that NVST is likely the superior value option right now.

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

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