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UNVR vs. PPG: Which Stock Is the Better Value Option?

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Investors interested in stocks from the Chemical - Diversified sector have probably already heard of Univar and PPG Industries (PPG - 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.

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.

Univar and PPG Industries are sporting Zacks Ranks of #1 (Strong Buy) and #2 (Buy), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that UNVR is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture for value investors.

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.

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.

UNVR currently has a forward P/E ratio of 15.11, while PPG has a forward P/E of 22.03. We also note that UNVR has a PEG ratio of 1.08. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. PPG currently has a PEG ratio of 1.20.

Another notable valuation metric for UNVR is its P/B ratio of 2.32. 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, PPG has a P/B of 7.07.

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

UNVR stands above PPG thanks to its solid earnings outlook, and based on these valuation figures, we also feel that UNVR is the superior value option right now.


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