ADUS or USPH: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Medical - Outpatient and Home Healthcare sector have probably already heard of Addus HomeCare (ADUS) and U.S. Physical Therapy (USPH). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. 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.
Currently, Addus HomeCare has a Zacks Rank of #2 (Buy), while U.S. Physical Therapy has a Zacks Rank of #5 (Strong Sell). This means that ADUS's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.
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.
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.
ADUS currently has a forward P/E ratio of 19.99, while USPH has a forward P/E of 38.66. We also note that ADUS has a PEG ratio of 1.52. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. USPH currently has a PEG ratio of 5.08.
Another notable valuation metric for ADUS is its P/B ratio of 2.22. 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, USPH has a P/B of 3.35.
These are just a few of the metrics contributing to ADUS's Value grade of B and USPH's Value grade of D.
ADUS sticks out from USPH in both our Zacks Rank and Style Scores models, so value investors will likely feel that ADUS is the better option right now.
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Addus HomeCare Corporation (ADUS) : Free Stock Analysis Report
U.S. Physical Therapy, Inc. (USPH) : Free Stock Analysis Report
