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BASFY vs. RDSMY: Which Stock Should Value Investors Buy Now?

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Zacks Equity Research
·2 min read
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Investors with an interest in Chemical - Diversified stocks have likely encountered both BASF SE (BASFY) and Koninklijke DSM NV (RDSMY). 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

BASF SE and Koninklijke DSM NV are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that BASFY has an improving earnings outlook. But this is only part of the picture for value investors.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.

BASFY currently has a forward P/E ratio of 15.63, while RDSMY has a forward P/E of 29.97. We also note that BASFY has a PEG ratio of 2.31. 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. RDSMY currently has a PEG ratio of 4.93.

Another notable valuation metric for BASFY is its P/B ratio of 1.75. 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 3.68.

Based on these metrics and many more, BASFY holds a Value grade of B, while RDSMY has a Value grade of D.

BASFY has seen stronger estimate revision activity and sports more attractive valuation metrics than RDSMY, so it seems like value investors will conclude that BASFY is the superior option right now.


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BASF SE (BASFY) : Free Stock Analysis Report
 
Koninklijke DSM NV (RDSMY) : Free Stock Analysis Report
 
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