AXTA vs. NVZMY: Which Stock Should Value Investors Buy Now?
Investors looking for stocks in the Chemical - Specialty sector might want to consider either Axalta Coating Systems (AXTA) or Novozymes A/S (NVZMY). But which of these two stocks presents investors with the better value opportunity right now? Let's 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.
Axalta Coating Systems and Novozymes A/S are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. This means that AXTA's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. 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 Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
AXTA currently has a forward P/E ratio of 21.13, while NVZMY has a forward P/E of 26.89. We also note that AXTA has a PEG ratio of 1.29. 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. NVZMY currently has a PEG ratio of 10.26.
Another notable valuation metric for AXTA is its P/B ratio of 4.53. 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, NVZMY has a P/B of 5.68.
These metrics, and several others, help AXTA earn a Value grade of A, while NVZMY has been given a Value grade of C.
AXTA has seen stronger estimate revision activity and sports more attractive valuation metrics than NVZMY, so it seems like value investors will conclude that AXTA is the superior option right now.
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Axalta Coating Systems Ltd. (AXTA) : Free Stock Analysis Report
Novozymes A/S (NVZMY) : Free Stock Analysis Report
