CBT vs. AIQUY: Which Stock Is the Better Value Option?
Investors looking for stocks in the Chemical - Diversified sector might want to consider either Cabot (CBT) or Air Liquide (AIQUY). 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.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Cabot and Air Liquide are both sporting a Zacks Rank of # 2 (Buy) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. But this is just one piece of the puzzle for value investors.
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 Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
CBT currently has a forward P/E ratio of 11.36, while AIQUY has a forward P/E of 24.84. We also note that CBT has a PEG ratio of 2.31. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. AIQUY currently has a PEG ratio of 2.93.
Another notable valuation metric for CBT is its P/B ratio of 3.18. 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, AIQUY has a P/B of 3.37.
These metrics, and several others, help CBT earn a Value grade of A, while AIQUY has been given a Value grade of C.
Both CBT and AIQUY are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that CBT is the superior value option right now.
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Cabot Corporation (CBT) : Free Stock Analysis Report
Air Liquide (AIQUY) : Free Stock Analysis Report
