Investors interested in Soap and Cleaning Materials stocks are likely familiar with Unilever PLC (UL) and Clorox (CLX). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Right now, Unilever PLC is sporting a Zacks Rank of #2 (Buy), while Clorox has a Zacks Rank of #3 (Hold). This means that UL's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture for value investors.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
UL currently has a forward P/E ratio of 21.66, while CLX has a forward P/E of 23.78. We also note that UL has a PEG ratio of 3.37. 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. CLX currently has a PEG ratio of 4.35.
Another notable valuation metric for UL is its P/B ratio of 4.99. 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, CLX has a P/B of 24.40.
These metrics, and several others, help UL earn a Value grade of A, while CLX has been given a Value grade of C.
UL stands above CLX thanks to its solid earnings outlook, and based on these valuation figures, we also feel that UL is the superior value option right now.
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Unilever PLC (UL) : Free Stock Analysis Report
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