BAX vs. LMAT: 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 Baxter International (BAX) or LeMaitre Vascular (LMAT). 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, Baxter International has a Zacks Rank of #2 (Buy), while LeMaitre Vascular has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that BAX has an improving earnings outlook. However, value investors will care about much more than just this.
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 Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
BAX currently has a forward P/E ratio of 12.46, while LMAT has a forward P/E of 49.01. We also note that BAX has a PEG ratio of 1.25. 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. LMAT currently has a PEG ratio of 2.39.
Another notable valuation metric for BAX is its P/B ratio of 2.44. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, LMAT has a P/B of 6.38.
Based on these metrics and many more, BAX holds a Value grade of A, while LMAT has a Value grade of D.
BAX stands above LMAT thanks to its solid earnings outlook, and based on these valuation figures, we also feel that BAX is the superior value option right now.
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Baxter International Inc. (BAX) : Free Stock Analysis Report
LeMaitre Vascular, Inc. (LMAT) : Free Stock Analysis Report