EMN vs. PPG: Which Stock Should Value Investors Buy Now?
Investors interested in Chemical - Diversified stocks are likely familiar with Eastman Chemical (EMN) and PPG Industries (PPG). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Both Eastman Chemical and PPG Industries have a Zacks Rank of # 2 (Buy) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. However, value investors will care about much more than just this.
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.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
EMN currently has a forward P/E ratio of 15.26, while PPG has a forward P/E of 23.72. We also note that EMN has a PEG ratio of 3.52. 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. PPG currently has a PEG ratio of 3.57.
Another notable valuation metric for EMN is its P/B ratio of 1.94. 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, PPG has a P/B of 5.85.
These metrics, and several others, help EMN earn a Value grade of B, while PPG has been given a Value grade of C.
Both EMN and PPG are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that EMN is the superior value option right now.
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Eastman Chemical Company (EMN): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.