Back to top

Image: Bigstock

UL vs. CLX: Which Stock Should Value Investors Buy Now?

Read MoreHide Full Article

Investors interested in stocks from the Soap and Cleaning Materials sector have probably already heard of Unilever PLC (UL - Free Report) and Clorox (CLX - Free Report) . 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.

Unilever PLC has a Zacks Rank of #2 (Buy), while Clorox has a Zacks Rank of #3 (Hold) right now. This means that UL'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 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.

UL currently has a forward P/E ratio of 19.92, while CLX has a forward P/E of 25.70. We also note that UL has a PEG ratio of 3.46. 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. CLX currently has a PEG ratio of 3.98.

Another notable valuation metric for UL is its P/B ratio of 4.50. 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, CLX has a P/B of 30.58.

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

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


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Unilever PLC (UL) - free report >>

The Clorox Company (CLX) - free report >>

Published in