Markets

PQG vs. COIHY: Which Stock Should Value Investors Buy Now?

Investors interested in Chemical - Specialty stocks are likely familiar with PQ Group (PQG) and Croda International PLC Unsponsored ADR (COIHY). But which of these two companies is the best option for those looking for undervalued stocks? Let's 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.

PQ Group and Croda International PLC Unsponsored ADR are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that PQG likely has seen a stronger improvement to its earnings outlook than COIHY has recently. However, value investors will care about much more than just this.

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.

PQG currently has a forward P/E ratio of 17.93, while COIHY has a forward P/E of 25.49. We also note that PQG has a PEG ratio of 1.12. 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. COIHY currently has a PEG ratio of 2.12.

Another notable valuation metric for PQG is its P/B ratio of 1.29. 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, COIHY has a P/B of 7.07.

These metrics, and several others, help PQG earn a Value grade of B, while COIHY has been given a Value grade of D.

PQG 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 PQG is likely the superior value option right now.


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PQ Group Holdings Inc. (PQG): Free Stock Analysis Report

Croda International PLC Unsponsored ADR (COIHY): 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.