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AVNT vs. PPG: Which Stock Should Value Investors Buy Now?

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Investors interested in Chemical - Diversified stocks are likely familiar with Avient (AVNT - Free Report) and PPG Industries (PPG - 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, Avient has a Zacks Rank of #2 (Buy), while PPG Industries has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that AVNT likely has seen a stronger improvement to its earnings outlook than PPG has recently. But this is just one piece of the puzzle for value investors.

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.

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.

AVNT currently has a forward P/E ratio of 20.65, while PPG has a forward P/E of 27.07. We also note that AVNT has a PEG ratio of 2.82. 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. PPG currently has a PEG ratio of 4.79.

Another notable valuation metric for AVNT is its P/B ratio of 1.91. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, PPG has a P/B of 6.45.

These metrics, and several others, help AVNT earn a Value grade of B, while PPG has been given a Value grade of C.

AVNT has seen stronger estimate revision activity and sports more attractive valuation metrics than PPG, so it seems like value investors will conclude that AVNT is the superior option right now.


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