GILD or GMAB: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Medical - Biomedical and Genetics sector have probably already heard of Gilead Sciences (GILD) and Genmab AS Sponsored ADR (GMAB). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. 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.
Both Gilead Sciences and Genmab AS Sponsored ADR have a Zacks Rank of # 2 (Buy) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. However, value investors will care about much more than just this.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether 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.
GILD currently has a forward P/E ratio of 12.20, while GMAB has a forward P/E of 31.67. We also note that GILD has a PEG ratio of 0.80. 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. GMAB currently has a PEG ratio of 1.14.
Another notable valuation metric for GILD is its P/B ratio of 4.94. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, GMAB has a P/B of 7.37.
These metrics, and several others, help GILD earn a Value grade of A, while GMAB has been given a Value grade of C.
Both GILD and GMAB are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that GILD is the superior value option right now.
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Gilead Sciences, Inc. (GILD) : Free Stock Analysis Report
Genmab AS Sponsored ADR (GMAB) : Free Stock Analysis Report
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