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UL or CLX: Which Is the Better Value Stock Right Now?

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Investors looking for stocks in the Soap and Cleaning Materials sector might want to consider either Unilever PLC (UL - Free Report) or 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.

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.

Currently, Unilever PLC has a Zacks Rank of #1 (Strong Buy), while Clorox has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that UL 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 also tend to look at a number of traditional, tried-and-true figures to help them find stocks 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.

UL currently has a forward P/E ratio of 20.54, while CLX has a forward P/E of 24.36. We also note that UL has a PEG ratio of 3.19. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. CLX currently has a PEG ratio of 3.98.

Another notable valuation metric for UL is its P/B ratio of 4.73. 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, CLX has a P/B of 26.52.

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

UL is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that UL is likely the superior value option right now.


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