UN or CL: Which Is the Better Value Stock Right Now?
Investors interested in Soap and Cleaning Materials stocks are likely familiar with Unilever NV (UN) and Colgate-Palmolive (CL). 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Both Unilever NV and Colgate-Palmolive have a Zacks Rank of # 2 (Buy) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. 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.
UN currently has a forward P/E ratio of 20.27, while CL has a forward P/E of 23.95. We also note that UN has a PEG ratio of 3.10. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. CL currently has a PEG ratio of 4.38.
Another notable valuation metric for UN is its P/B ratio of 6.87. 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, CL has a P/B of 298.59.
These are just a few of the metrics contributing to UN's Value grade of B and CL's Value grade of D.
Both UN and CL are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that UN is the superior value option right now.
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Unilever NV (UN) : Free Stock Analysis Report
Colgate-Palmolive Company (CL) : Free Stock Analysis Report
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