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

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Investors interested in stocks from the Chemical - Diversified sector have probably already heard of Huntsman (HUN - Free Report) and PPG Industries (PPG - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, Huntsman has a Zacks Rank of #1 (Strong Buy), while PPG Industries has a Zacks Rank of #2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that HUN is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle 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.

HUN currently has a forward P/E ratio of 14.77, while PPG has a forward P/E of 21.88. We also note that HUN has a PEG ratio of 1.66. 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. PPG currently has a PEG ratio of 3.19.

Another notable valuation metric for HUN is its P/B ratio of 1.85. 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 6.57.

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

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


In-Depth Zacks Research for the Tickers Above


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Huntsman Corporation (HUN) - free report >>

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