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BMY or AZN: Which Is the Better Value Stock Right Now?

Zacks Equity Research

Investors interested in Large Cap Pharmaceuticals stocks are likely familiar with Bristol-Myers Squibb (BMY) and Astrazeneca (AZN). 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, Bristol-Myers Squibb has a Zacks Rank of #2 (Buy), while Astrazeneca has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that BMY is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.

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.

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Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

BMY currently has a forward P/E ratio of 10.91, while AZN has a forward P/E of 24.73. We also note that BMY has a PEG ratio of 0.82. 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. AZN currently has a PEG ratio of 1.53.

Another notable valuation metric for BMY is its P/B ratio of 6.12. 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, AZN has a P/B of 9.85.

These are just a few of the metrics contributing to BMY's Value grade of A and AZN's Value grade of C.

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


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Bristol-Myers Squibb Company (BMY) : Free Stock Analysis Report
 
AstraZeneca PLC (AZN) : Free Stock Analysis Report
 
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Zacks Investment Research