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ICL vs. NGVT: Which Stock Is the Better Value Option?

Zacks Equity Research

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 stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Currently, Israel Chemicals has a Zacks Rank of #1 (Strong Buy), while Ingevity Corporation has a Zacks Rank of #4 (Sell). Investors should feel comfortable knowing that ICL likely has seen a stronger improvement to its earnings outlook than NGVT has recently. However, value investors will care about much more than just this.

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 Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

ICL currently has a forward P/E ratio of 12.05, while NGVT has a forward P/E of 20.64. We also note that ICL has a PEG ratio of 1.27. 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 1.72.

Another notable valuation metric for ICL is its P/B ratio of 1.65. 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, NGVT has a P/B of 11.68.

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

ICL sticks out from NGVT in both our Zacks Rank and Style Scores models, so value investors will likely feel that ICL is the better 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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