Investors with an interest in Medical - Outpatient and Home Healthcare stocks have likely encountered both Addus HomeCare (ADUS) and U.S. Physical Therapy (USPH). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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.

Addus HomeCare has a Zacks Rank of #2 (Buy), while U.S. Physical Therapy has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that ADUS has an improving earnings outlook. But this is only part of the picture 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.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

ADUS currently has a forward P/E ratio of 16.77, while USPH has a forward P/E of 26.11. We also note that ADUS has a PEG ratio of 1.46. 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. USPH currently has a PEG ratio of 3.15.

Another notable valuation metric for ADUS is its P/B ratio of 1.89. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, USPH has a P/B of 2.12.

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

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

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

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