ESI or NVZMY: Which Is the Better Value Stock Right Now?
Investors with an interest in Chemical - Specialty stocks have likely encountered both Element Solutions (ESI) and Novozymes A/S (NVZMY). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. 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, Element Solutions is sporting a Zacks Rank of #2 (Buy), while Novozymes A/S has a Zacks Rank of #4 (Sell). Investors should feel comfortable knowing that ESI likely has seen a stronger improvement to its earnings outlook than NVZMY has recently. However, value investors will care about much more than just this.
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.
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.
ESI currently has a forward P/E ratio of 14.82, while NVZMY has a forward P/E of 24.09. We also note that ESI has a PEG ratio of 2.87. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. NVZMY currently has a PEG ratio of 11.05.
Another notable valuation metric for ESI is its P/B ratio of 2.02. 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, NVZMY has a P/B of 4.68.
These are just a few of the metrics contributing to ESI's Value grade of B and NVZMY's Value grade of C.
ESI is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that ESI is likely the superior value option right now.
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Element Solutions Inc. (ESI) : Free Stock Analysis Report
Novozymes A/S (NVZMY) : Free Stock Analysis Report
