Investors looking for stocks in the Medical Services sector might want to consider either Solventum (SOLV) or Doximity (DOCS). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

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.

Solventum and Doximity are both sporting a Zacks Rank of # 2 (Buy) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. However, value investors will care about much more than just this.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.

SOLV currently has a forward P/E ratio of 11.90, while DOCS has a forward P/E of 40.23. We also note that SOLV has a PEG ratio of 1.70. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. DOCS currently has a PEG ratio of 2.18.

Another notable valuation metric for SOLV is its P/B ratio of 3.86. 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, DOCS has a P/B of 10.26.

These metrics, and several others, help SOLV earn a Value grade of A, while DOCS has been given a Value grade of D.

Both SOLV and DOCS are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that SOLV is the superior value option right now.

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Solventum Corporation (SOLV) : Free Stock Analysis Report

Doximity, Inc. (DOCS) : Free Stock Analysis Report

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

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