Investors interested in stocks from the Chemical - Specialty sector have probably already heard of Westlake Chemical Partners (WLKP) and H. B. Fuller (FUL). But which of these two stocks presents investors with the better value opportunity right now? 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Westlake Chemical Partners has a Zacks Rank of #1 (Strong Buy), while H. B. Fuller has a Zacks Rank of #3 (Hold) 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 analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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 10.56, while FUL has a forward P/E of 12.72. We also note that WLKP has a PEG ratio of 0.66. 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. FUL currently has a PEG ratio of 1.06.
Another notable valuation metric for WLKP is its P/B ratio of 0.73. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, FUL has a P/B of 1.81.
These are just a few of the metrics contributing to WLKP's Value grade of A and FUL's Value grade of C.
WLKP has seen stronger estimate revision activity and sports more attractive valuation metrics than FUL, 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
H. B. Fuller Company (FUL): Free Stock Analysis Report
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