Back to top

Image: Bigstock

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

Read MoreHide Full Article

Investors with an interest in Soap and Cleaning Materials stocks have likely encountered both Unilever NV and Clorox (CLX - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Currently, Unilever NV has a Zacks Rank of #1 (Strong Buy), while Clorox has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that UN likely has seen a stronger improvement to its earnings outlook than CLX has recently. 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.

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.

UN currently has a forward P/E ratio of 19.62, while CLX has a forward P/E of 24.64. We also note that UN has a PEG ratio of 3.20. 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. CLX currently has a PEG ratio of 3.87.

Another notable valuation metric for UN is its P/B ratio of 6.56. 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, CLX has a P/B of 26.95.

Based on these metrics and many more, UN holds a Value grade of B, while CLX has a Value grade of D.

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


See More Zacks Research for These Tickers


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


The Clorox Company (CLX) - free report >>

Published in