FUL or NVZMY: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Chemical - Specialty sector might want to consider either H. B. Fuller (FUL) or Novozymes A/S (NVZMY). 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.
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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, H. B. Fuller is sporting a Zacks Rank of #2 (Buy), while Novozymes A/S has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that FUL is likely seeing its earnings outlook improve to a greater extent. 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.
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.
FUL currently has a forward P/E ratio of 13.57, while NVZMY has a forward P/E of 24.55. We also note that FUL has a PEG ratio of 0.85. 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. NVZMY currently has a PEG ratio of 1.11.
Another notable valuation metric for FUL is its P/B ratio of 1.71. 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, NVZMY has a P/B of 1.93.
Based on these metrics and many more, FUL holds a Value grade of B, while NVZMY has a Value grade of D.
FUL 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 FUL is likely the superior value option right now.
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Novozymes A/S (NVZMY) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
