Investors interested in the Medical – Outpatient and Home Healthcare sector may be familiar with Addus HomeCare (ADUS) and U.S. Physical Therapy (USPH). But which of these stocks provides a better value opportunity?
To determine value opportunities, it is helpful to combine a strong Zacks Rank with a high grade in the Value category of the Style Scores system. The Zacks Rank focuses on earnings estimates and revisions, while the Style Scores identify stocks with specific traits.
Currently, Addus HomeCare has a Zacks Rank of #2 (Buy), indicating impressive earnings estimate revision activity. On the other hand, U.S. Physical Therapy has a Zacks Rank of #3 (Hold).
Value investors also consider traditional figures to identify undervalued stocks. The Style Score Value grade takes into account fundamental metrics such as the P/E ratio, P/S ratio, earnings yield, cash flow per share, and other key statistics commonly used by value investors.
Addus HomeCare has a forward P/E ratio of 20.01, while U.S. Physical Therapy has a forward P/E of 34.47. In terms of expected earnings growth rate, Addus HomeCare’s PEG ratio is 1.58, while U.S. Physical Therapy’s PEG ratio is 4.53.
Additionally, Addus HomeCare has a P/B ratio of 2.07, which compares the stock’s market value to its book value. U.S. Physical Therapy has a slightly higher P/B ratio of 2.46.
Based on these metrics, Addus HomeCare receives a Value grade of B, while U.S. Physical Therapy receives a Value grade of C.
In conclusion, Addus HomeCare stands out with its solid earnings outlook and favorable valuation figures. Therefore, it appears to be the superior value option among these two stocks.
Source: Zacks Investment Research