GEHC or ABT: Which Is the Better Value Stock Right Now?

Investors interested in Medical - Products stocks are likely familiar with GE HealthCare Technologies (GEHC) and Abbott (ABT). 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

GE HealthCare Technologies has a Zacks Rank of #2 (Buy), while Abbott has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that GEHC is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.

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.

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.

GEHC currently has a forward P/E ratio of 14.24, while ABT has a forward P/E of 18.14. We also note that GEHC has a PEG ratio of 1.57. 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. ABT currently has a PEG ratio of 1.64.

Another notable valuation metric for GEHC is its P/B ratio of 3.12. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, ABT has a P/B of 3.38.

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

GEHC stands above ABT thanks to its solid earnings outlook, and based on these valuation figures, we also feel that GEHC is the superior value option right now.

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GE HealthCare Technologies Inc. (GEHC): Free Stock Analysis Report

Abbott Laboratories (ABT): Free Stock Analysis Report

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

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