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BAYRY vs. NVO: Which Stock Is the Better Value Option?

Investors interested in Large Cap Pharmaceuticals stocks are likely familiar with Bayer Aktiengesellschaft (BAYRY) and Novo Nordisk (NVO). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Right now, Bayer Aktiengesellschaft is sporting a Zacks Rank of #2 (Buy), while Novo Nordisk has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that BAYRY likely has seen a stronger improvement to its earnings outlook than NVO has recently. 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.

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.

BAYRY currently has a forward P/E ratio of 6.76, while NVO has a forward P/E of 34.99. We also note that BAYRY has a PEG ratio of 1.14. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. NVO currently has a PEG ratio of 1.83.

Another notable valuation metric for BAYRY is its P/B ratio of 1.33. 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, NVO has a P/B of 24.79.

These metrics, and several others, help BAYRY earn a Value grade of A, while NVO has been given a Value grade of C.

BAYRY has seen stronger estimate revision activity and sports more attractive valuation metrics than NVO, so it seems like value investors will conclude that BAYRY is the superior option right now.


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Bayer Aktiengesellschaft (BAYRY) : Free Stock Analysis Report
 
Novo Nordisk AS (NVO) : Free Stock Analysis Report
 
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