SNY vs. LLY: Which Stock Is the Better Value Option?
Investors with an interest in Large Cap Pharmaceuticals stocks have likely encountered both Sanofi (SNY) and Eli Lilly (LLY). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, Sanofi has a Zacks Rank of #2 (Buy), while Eli Lilly has a Zacks Rank of #3 (Hold). This means that SNY's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.
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.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
SNY currently has a forward P/E ratio of 11.31, while LLY has a forward P/E of 46.21. We also note that SNY has a PEG ratio of 1.11. 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. LLY currently has a PEG ratio of 2.30.
Another notable valuation metric for SNY is its P/B ratio of 1.57. 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, LLY has a P/B of 33.52.
These metrics, and several others, help SNY earn a Value grade of A, while LLY has been given a Value grade of C.
SNY has seen stronger estimate revision activity and sports more attractive valuation metrics than LLY, so it seems like value investors will conclude that SNY is the superior option right now.
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Sanofi (SNY) : Free Stock Analysis Report
Eli Lilly and Company (LLY) : Free Stock Analysis Report
