Investors with an interest in Chemical - Diversified stocks have likely encountered both Huntsman (HUN) and PPG Industries (PPG). 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Huntsman and PPG Industries are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. Investors should feel comfortable knowing that HUN likely has seen a stronger improvement to its earnings outlook than PPG has recently. But this is just one piece of the puzzle for value investors.
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.
HUN currently has a forward P/E ratio of 13.39, while PPG has a forward P/E of 21.27. We also note that HUN has a PEG ratio of 1.65. 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 2.28.
Another notable valuation metric for HUN is its P/B ratio of 2.10. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, PPG has a P/B of 5.87.
Based on these metrics and many more, HUN holds a Value grade of A, while PPG has a Value grade of D.
HUN has seen stronger estimate revision activity and sports more attractive valuation metrics than PPG, so it seems like value investors will conclude that HUN is the superior option right now.
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Huntsman Corporation (HUN): Free Stock Analysis Report
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