KWR vs. LIN: Which Stock Should Value Investors Buy Now?
Investors looking for stocks in the Chemical - Specialty sector might want to consider either Quaker Chemical (KWR) or Linde (LIN). 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 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, Quaker Chemical has a Zacks Rank of #2 (Buy), while Linde has a Zacks Rank of #4 (Sell). Investors should feel comfortable knowing that KWR likely has seen a stronger improvement to its earnings outlook than LIN has recently. But this is only part of the picture for value investors.
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 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.
KWR currently has a forward P/E ratio of 20.99, while LIN has a forward P/E of 26.57. We also note that KWR has a PEG ratio of 1. 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. LIN currently has a PEG ratio of 2.54.
Another notable valuation metric for KWR is its P/B ratio of 2.11. 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, LIN has a P/B of 4.41.
These are just a few of the metrics contributing to KWR's Value grade of B and LIN's Value grade of D.
KWR 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 KWR is likely the superior value option right now.
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Quaker Houghton (KWR) : Free Stock Analysis Report
Linde PLC (LIN) : Free Stock Analysis Report
