Investors interested in stocks from the Chemical - Specialty sector have probably already heard of Israel Chemicals (ICL) and Ingevity Corporation (NGVT). But which of these two companies is the best option for those looking for undervalued stocks? 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Israel Chemicals and Ingevity Corporation are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that ICL has an improving earnings outlook. However, value investors will care about much more than just this.
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.
ICL currently has a forward P/E ratio of 12.47, while NGVT has a forward P/E of 20.22. We also note that ICL has a PEG ratio of 1.31. 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. NGVT currently has a PEG ratio of 1.69.
Another notable valuation metric for ICL is its P/B ratio of 1.70. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, NGVT has a P/B of 11.27.
Based on these metrics and many more, ICL holds a Value grade of A, while NGVT has a Value grade of D.
ICL has seen stronger estimate revision activity and sports more attractive valuation metrics than NGVT, so it seems like value investors will conclude that ICL is the superior option right now.
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Israel Chemicals Shs (ICL) : Free Stock Analysis Report
Ingevity Corporation (NGVT) : Free Stock Analysis Report
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