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ICL vs. NVZMY: Which Stock Should Value Investors Buy Now?

·2 min read

Investors interested in stocks from the Chemical - Specialty sector have probably already heard of Israel Chemicals (ICL) and Novozymes AS (NVZMY). 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.

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.

Israel Chemicals has a Zacks Rank of #2 (Buy), while Novozymes AS has a Zacks Rank of #3 (Hold) 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. But this is just one factor that value investors are interested in.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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 17.38, while NVZMY has a forward P/E of 44.24. We also note that ICL has a PEG ratio of 0.68. 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. NVZMY currently has a PEG ratio of 9.90.

Another notable valuation metric for ICL is its P/B ratio of 2.71. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, NVZMY has a P/B of 10.16.

These metrics, and several others, help ICL earn a Value grade of B, while NVZMY has been given a Value grade of D.

ICL has seen stronger estimate revision activity and sports more attractive valuation metrics than NVZMY, so it seems like value investors will conclude that ICL is the superior option right now.


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ICL Group Ltd (ICL) : Free Stock Analysis Report
 
Novozymes AS (NVZMY) : Free Stock Analysis Report
 
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