BMY vs. VRTX: Which Stock Offers Better Value?

Investors looking for stocks in the medical, biomedical, and genetics sector might consider Bristol Myers Squibb (BMY) or Vertex Pharmaceuticals (VRTX). But which of these two stocks is more attractive to value investors? We’ll have to take a closer look to find out.

We have found that the best way to uncover good value opportunities is to pair a high Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies that exhibit positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Bristol Myers Squibb and Vertex Pharmaceuticals currently sport Zacks Ranks #2 (Buy) and #3 (Hold), respectively. Investors should take comfort in knowing that BMY has likely seen a stronger improvement in its earnings outlook than VRTX recently. But that’s 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 price levels.

The Value Style Score considers a variety of key fundamental metrics, including price-to-earnings ratio, price-to-earnings ratio, earnings yield, cash flow per share, and a number of other key statistics commonly used by value investors.

BMY currently has a forward P/E ratio of 62.67, while VRTX has a forward P/E ratio of 1,098.93. We also note that BMY has a PEG ratio of 12.53. This figure is similar to the commonly used P/E ratio, as the PEG ratio also takes into account a company’s expected earnings growth rate. VRTX currently has a PEG ratio of 87.91.

Another notable valuation indicator for BMY is its price-to-book ratio of 5.75. The price-to-book ratio compares a stock’s market value to its book value, which is defined as total assets minus total liabilities. For comparison, VRTX has a price-to-book ratio of 8.23.

These are just a few of the metrics contributing to BMY’s A Value Grade and VRTX’s D Value Grade.

BMY is currently sporting an improving earnings outlook, which makes it a standout in our Zacks Rank model. And, based on the above valuation metrics, we believe BMY is likely the superior value option right now.

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Bristol Myers Squibb Company (BMY): Free Stock Analysis Report

Vertex Pharmaceuticals Incorporated (VRTX) : Free Stock Analysis Report

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