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LYB vs. APD: Which Stock Is the Better Value Option?

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Investors with an interest in Chemical - Diversified stocks have likely encountered both LyondellBasell (LYB - Free Report) and Air Products and Chemicals (APD - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Right now, LyondellBasell is sporting a Zacks Rank of #1 (Strong Buy), while Air Products and Chemicals has a Zacks Rank of #5 (Strong Sell). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that LYB has an improving earnings outlook. 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 highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

LYB currently has a forward P/E ratio of 12.59, while APD has a forward P/E of 30.80. We also note that LYB has a PEG ratio of 1.57. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. APD currently has a PEG ratio of 3.61.

Another notable valuation metric for LYB is its P/B ratio of 4.41. 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, APD has a P/B of 5.07.

These are just a few of the metrics contributing to LYB's Value grade of A and APD's Value grade of D.

LYB sticks out from APD in both our Zacks Rank and Style Scores models, so value investors will likely feel that LYB is the better option right now.


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Air Products and Chemicals, Inc. (APD) - free report >>

LyondellBasell Industries N.V. (LYB) - free report >>

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