ESI or GVDNY: Which Is the Better Value Stock Right Now?
Investors with an interest in Chemical - Specialty stocks have likely encountered both Element Solutions (ESI) and Givaudan SA (GVDNY). But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 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, both Element Solutions and Givaudan SA are sporting a Zacks Rank of # 2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is just one factor that value investors are interested in.
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 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.
ESI currently has a forward P/E ratio of 13.98, while GVDNY has a forward P/E of 31.15. We also note that ESI has a PEG ratio of 1.78. 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. GVDNY currently has a PEG ratio of 3.32.
Another notable valuation metric for ESI is its P/B ratio of 1.96. 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, GVDNY has a P/B of 7.14.
Based on these metrics and many more, ESI holds a Value grade of A, while GVDNY has a Value grade of C.
Both ESI and GVDNY are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that ESI is the superior value option right now.
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Element Solutions Inc. (ESI) : Free Stock Analysis Report
Givaudan SA (GVDNY) : Free Stock Analysis Report
