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FUL vs. LTHM: Which Stock Is the Better Value Option?

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  • LTHM

Investors interested in Chemical - Specialty stocks are likely familiar with H. B. Fuller (FUL) and Livent (LTHM). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great 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.

H. B. Fuller and Livent are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. This means that FUL'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 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.

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.

FUL currently has a forward P/E ratio of 18.14, while LTHM has a forward P/E of 160.25. We also note that FUL has a PEG ratio of 2.13. 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. LTHM currently has a PEG ratio of 3.29.

Another notable valuation metric for FUL is its P/B ratio of 2.33. 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, LTHM has a P/B of 4.49.

These are just a few of the metrics contributing to FUL's Value grade of B and LTHM's Value grade of D.

FUL 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 FUL is likely the superior value option right now.


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H. B. Fuller Company (FUL) : Free Stock Analysis Report
 
Livent Corporation (LTHM) : Free Stock Analysis Report
 
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