Investors with an interest in Chemical - Specialty stocks have likely encountered both Westlake Chemical Partners (WLKP) and H. B. Fuller (FUL). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Westlake Chemical Partners has a Zacks Rank of #1 (Strong Buy), while H. B. Fuller has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that WLKP likely has seen a stronger improvement to its earnings outlook than FUL has recently. But this is just one factor that value investors are interested in.
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.
WLKP currently has a forward P/E ratio of 11.56, while FUL has a forward P/E of 13.19. We also note that WLKP has a PEG ratio of 0.72. 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. FUL currently has a PEG ratio of 1.10.
Another notable valuation metric for WLKP is its P/B ratio of 0.80. 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, FUL has a P/B of 1.88.
These metrics, and several others, help WLKP earn a Value grade of A, while FUL has been given a Value grade of C.
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.
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Westlake Chemical Partners LP (WLKP) : Free Stock Analysis Report
H. B. Fuller Company (FUL) : Free Stock Analysis Report
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