Yahoo Finance BAX vs. PODD: Which Stock Should Value Investors Buy Now?
Investors interested in stocks from the Medical - Products sector have probably already heard of Baxter International (BAX) and Insulet (PODD). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive 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.
Baxter International has a Zacks Rank of #2 (Buy), while Insulet has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that BAX is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.
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.
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.
BAX currently has a forward P/E ratio of 13.41, while PODD has a forward P/E of 77.04. We also note that BAX has a PEG ratio of 1.34. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. PODD currently has a PEG ratio of 4.38.
Another notable valuation metric for BAX is its P/B ratio of 2.63. 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, PODD has a P/B of 16.41.
Based on these metrics and many more, BAX holds a Value grade of A, while PODD has a Value grade of D.
BAX has seen stronger estimate revision activity and sports more attractive valuation metrics than PODD, so it seems like value investors will conclude that BAX is the superior option right now.
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Baxter International Inc. (BAX) : Free Stock Analysis Report
Insulet Corporation (PODD) : Free Stock Analysis Report
