Investors interested in stocks from the Medical - Products sector have probably already heard of Prestige Consumer Healthcare (PBH) and Stryker (SYK). But which of these two stocks presents investors with the better value opportunity right now? 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.

Prestige Consumer Healthcare has a Zacks Rank of #2 (Buy), while Stryker has a Zacks Rank of #4 (Sell) right now. Investors should feel comfortable knowing that PBH likely has seen a stronger improvement to its earnings outlook than SYK has recently. But this is just one factor that value investors are interested in.

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.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

PBH currently has a forward P/E ratio of 16.76, while SYK has a forward P/E of 25.04. We also note that PBH has a PEG ratio of 2.39. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. SYK currently has a PEG ratio of 2.55.

Another notable valuation metric for PBH is its P/B ratio of 2.30. 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, SYK has a P/B of 6.71.

Based on these metrics and many more, PBH holds a Value grade of B, while SYK has a Value grade of D.

PBH is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that PBH is likely the superior value option right now.

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Prestige Consumer Healthcare Inc. (PBH) : Free Stock Analysis Report

Stryker Corporation (SYK) : Free Stock Analysis Report

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

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