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MTX or ECL: Which Is the Better Value Stock Right Now?

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Investors interested in Chemical - Specialty stocks are likely familiar with Minerals Technologies (MTX - Free Report) and Ecolab (ECL - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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.

Minerals Technologies and Ecolab are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that MTX's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.

MTX currently has a forward P/E ratio of 17.36, while ECL has a forward P/E of 42.10. We also note that MTX has a PEG ratio of 2.20. 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. ECL currently has a PEG ratio of 3.87.

Another notable valuation metric for MTX is its P/B ratio of 1.87. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, ECL has a P/B of 9.65.

These metrics, and several others, help MTX earn a Value grade of B, while ECL has been given a Value grade of D.

MTX 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 MTX is likely the superior value option right now.


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