UNVR vs. RDSMY: Which Stock Is the Better Value Option?
Investors with an interest in Chemical - Diversified stocks have likely encountered both Univar (UNVR) and Koninklijke DSM NV (RDSMY). But which of these two companies is the best option for those looking for undervalued stocks? 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.
Univar and Koninklijke DSM NV are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. Investors should feel comfortable knowing that UNVR likely has seen a stronger improvement to its earnings outlook than RDSMY has recently. However, value investors will care about much more than just this.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.
UNVR currently has a forward P/E ratio of 14.10, while RDSMY has a forward P/E of 38.49. We also note that UNVR has a PEG ratio of 1.09. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. RDSMY currently has a PEG ratio of 2.49.
Another notable valuation metric for UNVR is its P/B ratio of 2.16. 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, RDSMY has a P/B of 3.89.
These metrics, and several others, help UNVR earn a Value grade of B, while RDSMY has been given a Value grade of C.
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.
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Univar Solutions Inc. (UNVR) : Free Stock Analysis Report
Koninklijke DSM NV (RDSMY) : Free Stock Analysis Report
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