Investors looking for stocks in the Chemical - Specialty sector might want to consider either Celanese (CE) or Ecolab (ECL). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, Celanese has a Zacks Rank of #2 (Buy), while Ecolab has a Zacks Rank of #5 (Strong Sell). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that CE has an improving earnings 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.
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.
CE currently has a forward P/E ratio of 12.64, while ECL has a forward P/E of 40.74. We also note that CE has a PEG ratio of 3.24. 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. ECL currently has a PEG ratio of 4.38.
Another notable valuation metric for CE is its P/B ratio of 3.56. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, ECL has a P/B of 6.38.
These are just a few of the metrics contributing to CE's Value grade of B and ECL's Value grade of F.
CE stands above ECL thanks to its solid earnings outlook, and based on these valuation figures, we also feel that CE is the superior value option right now.
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Celanese Corporation (CE) : Free Stock Analysis Report
Ecolab Inc. (ECL) : Free Stock Analysis Report
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