Back to top

Image: Bigstock

WLKP vs. ECL: Which Stock Should Value Investors Buy Now?

Read MoreHide Full Article

Investors interested in stocks from the Chemical - Specialty sector have probably already heard of Westlake Chemical Partners (WLKP - Free Report) and Ecolab (ECL - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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 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.

Westlake Chemical Partners has a Zacks Rank of #2 (Buy), while Ecolab has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that WLKP likely has seen a stronger improvement to its earnings outlook than ECL has recently. But this is only part of the picture for value investors.

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.

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.

WLKP currently has a forward P/E ratio of 11.21, while ECL has a forward P/E of 53.35. We also note that WLKP has a PEG ratio of 3.42. 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. ECL currently has a PEG ratio of 5.05.

Another notable valuation metric for WLKP is its P/B ratio of 0.83. 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, ECL has a P/B of 10.13.

These are just a few of the metrics contributing to WLKP's Value grade of A and ECL's Value grade of D.

WLKP 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 WLKP is likely the superior value option right now.


In-Depth Zacks Research for the Tickers Above


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


Westlake Chemical Partners LP (WLKP) - free report >>

Ecolab Inc. (ECL) - free report >>

Published in