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ARKAY vs. AVNT: 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 Arkema SA (ARKAY - Free Report) and Avient (AVNT - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

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 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.

Arkema SA and Avient are both sporting a Zacks Rank of # 2 (Buy) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is just one factor that value investors are interested in.

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 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.

ARKAY currently has a forward P/E ratio of 15.43, while AVNT has a forward P/E of 18.25. We also note that ARKAY has a PEG ratio of 0.64. 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. AVNT currently has a PEG ratio of 1.83.

Another notable valuation metric for ARKAY is its P/B ratio of 1.51. 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, AVNT has a P/B of 2.67.

These metrics, and several others, help ARKAY earn a Value grade of A, while AVNT has been given a Value grade of C.

Both ARKAY and AVNT are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that ARKAY is the superior value option right now.


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