U.S. markets closed
  • S&P Futures

    3,851.00
    +6.00 (+0.16%)
     
  • Dow Futures

    31,118.00
    +22.00 (+0.07%)
     
  • Nasdaq Futures

    13,354.25
    +60.00 (+0.45%)
     
  • Russell 2000 Futures

    2,157.70
    0.00 (0.00%)
     
  • Crude Oil

    53.28
    +0.04 (+0.08%)
     
  • Gold

    1,867.70
    +1.20 (+0.06%)
     
  • Silver

    25.78
    +0.01 (+0.05%)
     
  • EUR/USD

    1.2129
    +0.0013 (+0.11%)
     
  • 10-Yr Bond

    1.0900
    -0.0020 (-0.18%)
     
  • Vix

    21.58
    -1.66 (-7.14%)
     
  • GBP/USD

    1.3674
    +0.0018 (+0.13%)
     
  • USD/JPY

    103.5480
    -0.0220 (-0.02%)
     
  • BTC-USD

    34,860.23
    -135.11 (-0.39%)
     
  • CMC Crypto 200

    691.53
    -9.09 (-1.30%)
     
  • FTSE 100

    6,740.39
    +27.44 (+0.41%)
     
  • Nikkei 225

    28,747.50
    +224.24 (+0.79%)
     

WLKP or ECL: Which Is the Better Value Stock Right Now?

Zacks Equity Research
·2 min read

Investors interested in stocks from the Chemical - Specialty sector have probably already heard of Westlake Chemical Partners (WLKP) and Ecolab (ECL). 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 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, Westlake Chemical Partners is sporting a Zacks Rank of #2 (Buy), while Ecolab has a Zacks Rank of #3 (Hold). This means that WLKP's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst 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.

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.

WLKP currently has a forward P/E ratio of 10.52, while ECL has a forward P/E of 52.86. We also note that WLKP has a PEG ratio of 3.21. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. ECL currently has a PEG ratio of 5.

Another notable valuation metric for WLKP is its P/B ratio of 0.78. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, ECL has a P/B of 10.09.

These are just a few of the metrics contributing to WLKP's Value grade of A and ECL's Value grade of D.

WLKP is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that WLKP is likely 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
 
Westlake Chemical Partners LP (WLKP) : Free Stock Analysis Report
 
Ecolab Inc. (ECL) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research