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ESI vs. CE: Which Stock Is the Better Value Option?

Zacks Equity Research
·2 min read

Investors interested in Chemical - Specialty stocks are likely familiar with Element Solutions (ESI) and Celanese (CE). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Right now, Element Solutions is sporting a Zacks Rank of #2 (Buy), while Celanese has a Zacks Rank of #3 (Hold). This means that ESI's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture for value investors.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies 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.

ESI currently has a forward P/E ratio of 13.88, while CE has a forward P/E of 17.87. We also note that ESI has a PEG ratio of 1.89. 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. CE currently has a PEG ratio of 6.72.

Another notable valuation metric for ESI is its P/B ratio of 1.35. 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, CE has a P/B of 5.12.

These are just a few of the metrics contributing to ESI's Value grade of B and CE's Value grade of C.

ESI stands above CE thanks to its solid earnings outlook, and based on these valuation figures, we also feel that ESI is the superior value option right now.


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Element Solutions Inc (ESI) : Free Stock Analysis Report
 
Celanese Corporation (CE) : Free Stock Analysis Report
 
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Zacks Investment Research