ESI vs. GVDNY: Which Stock Is the Better Value Option?
Investors with an interest in Chemical - Specialty stocks have likely encountered both Element Solutions (ESI) and Givaudan SA (GVDNY). 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 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 Givaudan SA has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that ESI is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when 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 13.74, while GVDNY has a forward P/E of 31.03. We also note that ESI has a PEG ratio of 1.75. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. GVDNY currently has a PEG ratio of 3.31.
Another notable valuation metric for ESI is its P/B ratio of 1.93. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, GVDNY has a P/B of 7.06.
These metrics, and several others, help ESI earn a Value grade of A, while GVDNY has been given a Value grade of C.
ESI stands above GVDNY 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
Givaudan SA (GVDNY) : Free Stock Analysis Report
