CVS vs. HQY: Which Stock Is the Better Value Option?

Investors interested in stocks from the Medical Services sector have probably already heard of CVS Health (CVS) and HealthEquity (HQY). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.CVS Health has a Zacks Rank of #2 (Buy), while HealthEquity 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 CVS is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.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 Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.CVS currently has a forward P/E ratio of 11.31, while HQY has a forward P/E of 23.93. We also note that CVS has a PEG ratio of 0.79. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. HQY currently has a PEG ratio of 1.15.Another notable valuation metric for CVS is its P/B ratio of 1.17. 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, HQY has a P/B of 3.64.These are just a few of the metrics contributing to CVS's Value grade of A and HQY's Value grade of C.CVS sticks out from HQY in both our Zacks Rank and Style Scores models, so value investors will likely feel that CVS is the better option right now.Beyond Nvidia: AI's Second Wave Is HereThe AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. Little-known AI firms tackling the world's biggest problems may be more lucrative in the coming months and years.See "2nd Wave" AI stocks now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report CVS Health Corporation (CVS): Free Stock Analysis Report HealthEquity, Inc. (HQY): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks