WLKP vs. NVZMY: Which Stock Should Value Investors Buy Now?
Investors interested in stocks from the Chemical - Specialty sector have probably already heard of Westlake Chemical Partners (WLKP) and Novozymes A/S (NVZMY). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 and Novozymes A/S are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. 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 are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.
WLKP currently has a forward P/E ratio of 12.47, while NVZMY has a forward P/E of 27.65. We also note that WLKP has a PEG ratio of 1.55. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. NVZMY currently has a PEG ratio of 11.11.
Another notable valuation metric for WLKP is its P/B ratio of 0.86. 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, NVZMY has a P/B of 5.92.
These are just a few of the metrics contributing to WLKP's Value grade of A and NVZMY's Value grade of D.
WLKP has seen stronger estimate revision activity and sports more attractive valuation metrics than NVZMY, so it seems like value investors will conclude that WLKP is the superior option right now.
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Westlake Chemical Partners LP (WLKP) : Free Stock Analysis Report
Novozymes A/S (NVZMY) : Free Stock Analysis Report
