MOS or CF: Which Is the Better Value Stock Right Now?
Investors interested in Fertilizers stocks are likely familiar with Mosaic (MOS) and CF Industries (CF). But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, both Mosaic and CF Industries are holding a Zacks Rank of # 1 (Strong Buy). This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. But this is just one factor that value investors are interested in.
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.
MOS currently has a forward P/E ratio of 5.44, while CF has a forward P/E of 5.85. We also note that MOS has a PEG ratio of 0.78. 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. CF currently has a PEG ratio of 0.97.
Another notable valuation metric for MOS is its P/B ratio of 2.29. 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, CF has a P/B of 3.44.
Based on these metrics and many more, MOS holds a Value grade of B, while CF has a Value grade of C.
Both MOS and CF are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that MOS is the superior value option right now.
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The Mosaic Company (MOS) : Free Stock Analysis Report
CF Industries Holdings, Inc. (CF) : Free Stock Analysis Report
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