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HUN or RDSMY: Which Is the Better Value Stock Right Now?

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Investors looking for stocks in the Chemical - Diversified sector might want to consider either Huntsman (HUN - Free Report) or Koninklijke DSM NV . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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 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.

Huntsman has a Zacks Rank of #2 (Buy), while Koninklijke DSM NV has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that HUN likely has seen a stronger improvement to its earnings outlook than RDSMY has recently. But this is just one piece of the puzzle 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.

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 10.55, while RDSMY has a forward P/E of 31.02. We also note that HUN has a PEG ratio of 0.20. 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. RDSMY currently has a PEG ratio of 2.33.

Another notable valuation metric for HUN is its P/B ratio of 1.70. 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, RDSMY has a P/B of 3.89.

These are just a few of the metrics contributing to HUN's Value grade of B and RDSMY's Value grade of C.

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


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