UNVR or RDSMY: Which Is the Better Value Stock Right Now?
Investors interested in Chemical - Diversified stocks are likely familiar with Univar (UNVR) and Koninklijke DSM NV (RDSMY). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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, Univar has a Zacks Rank of #2 (Buy), while Koninklijke DSM NV has a Zacks Rank of #5 (Strong Sell). This means that UNVR'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 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.
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.
UNVR currently has a forward P/E ratio of 7.74, while RDSMY has a forward P/E of 29.87. We also note that UNVR has a PEG ratio of 0.54. 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. RDSMY currently has a PEG ratio of 2.78.
Another notable valuation metric for UNVR is its P/B ratio of 1.66. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, RDSMY has a P/B of 2.57.
These metrics, and several others, help UNVR earn a Value grade of A, while RDSMY has been given a Value grade of F.
UNVR stands above RDSMY thanks to its solid earnings outlook, and based on these valuation figures, we also feel that UNVR is the superior value option right now.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Univar Solutions Inc. (UNVR) : Free Stock Analysis Report
Koninklijke DSM NV (RDSMY) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
