LIN or GVDNY: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Chemical - Specialty sector have probably already heard of Linde (LIN) and Givaudan SA (GVDNY). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, Linde is sporting a Zacks Rank of #2 (Buy), while Givaudan SA has a Zacks Rank of #4 (Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that LIN is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
LIN currently has a forward P/E ratio of 28.33, while GVDNY has a forward P/E of 33.92. We also note that LIN has a PEG ratio of 2.71. 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. GVDNY currently has a PEG ratio of 4.82.
Another notable valuation metric for LIN is its P/B ratio of 4.82. 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, GVDNY has a P/B of 7.35.
These metrics, and several others, help LIN earn a Value grade of B, while GVDNY has been given a Value grade of D.
LIN stands above GVDNY thanks to its solid earnings outlook, and based on these valuation figures, we also feel that LIN is the superior value option right now.
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Linde PLC (LIN) : Free Stock Analysis Report
Givaudan SA (GVDNY) : Free Stock Analysis Report
