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HUN or PPG: Which Is the Better Value Stock Right Now?

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Investors interested in Chemical - Diversified stocks are likely familiar with Huntsman (HUN - Free Report) and PPG Industries (PPG - Free Report) . 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.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Huntsman has a Zacks Rank of #1 (Strong Buy), while PPG Industries has a Zacks Rank of #3 (Hold) right now. This means that HUN's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether 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.

HUN currently has a forward P/E ratio of 8.02, while PPG has a forward P/E of 18.08. We also note that HUN has a PEG ratio of 0.94. 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. PPG currently has a PEG ratio of 2.16.

Another notable valuation metric for HUN is its P/B ratio of 1.66. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, PPG has a P/B of 5.45.

These are just a few of the metrics contributing to HUN's Value grade of A and PPG's Value grade of C.

HUN stands above PPG thanks to its solid earnings outlook, and based on these valuation figures, we also feel that HUN is the superior value option right now.


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