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AXTA or DSEY: Which Is the Better Value Stock Right Now?

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Investors looking for stocks in the Chemical - Specialty sector might want to consider either Axalta Coating Systems (AXTA - Free Report) or Diversey Holdings, Ltd. . 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.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Axalta Coating Systems has a Zacks Rank of #2 (Buy), while Diversey Holdings, Ltd. has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that AXTA has an improving earnings outlook. But this is just one factor that value investors are interested in.

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 Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

AXTA currently has a forward P/E ratio of 15.92, while DSEY has a forward P/E of 29.05. We also note that AXTA has a PEG ratio of 0.71. 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. DSEY currently has a PEG ratio of 2.04.

Another notable valuation metric for AXTA is its P/B ratio of 5.40. 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, DSEY has a P/B of 8.57.

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

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


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