Investors interested in stocks from the Medical - Outpatient and Home Healthcare sector have probably already heard of Option Care (OPCH) and Chemed (CHE). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Currently, Option Care has a Zacks Rank of #1 (Strong Buy), while Chemed has a Zacks Rank of #4 (Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that OPCH is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.

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.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

OPCH currently has a forward P/E ratio of 20.03, while CHE has a forward P/E of 23.74. We also note that OPCH has a PEG ratio of 1.79. 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. CHE currently has a PEG ratio of 2.32.

Another notable valuation metric for OPCH is its P/B ratio of 4.12. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, CHE has a P/B of 7.95.

These are just a few of the metrics contributing to OPCH's Value grade of B and CHE's Value grade of C.

OPCH sticks out from CHE in both our Zacks Rank and Style Scores models, so value investors will likely feel that OPCH is the better option right now.

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Option Care Health, Inc. (OPCH) : Free Stock Analysis Report

Chemed Corporation (CHE) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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