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Investors with an interest in Chemical - Diversified stocks have likely encountered both Avient (AVNT) and Koninklijke DSM NV (RDSMY). 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.
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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Right now, Avient is sporting a Zacks Rank of #2 (Buy), while Koninklijke DSM NV has a Zacks Rank of #4 (Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that AVNT is likely seeing its earnings outlook improve to a greater extent. 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 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.
AVNT currently has a forward P/E ratio of 17, while RDSMY has a forward P/E of 33.75. We also note that AVNT has a PEG ratio of 1.70. 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. RDSMY currently has a PEG ratio of 2.53.
Another notable valuation metric for AVNT is its P/B ratio of 2.48. 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, RDSMY has a P/B of 4.23.
These are just a few of the metrics contributing to AVNT's Value grade of B and RDSMY's Value grade of C.
AVNT stands above RDSMY thanks to its solid earnings outlook, and based on these valuation figures, we also feel that AVNT is the superior value option right now.
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Avient Corporation (AVNT) : Free Stock Analysis Report
Koninklijke DSM NV (RDSMY) : Free Stock Analysis Report
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