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ARKAY vs. FMC: Which Stock Is the Better Value Option?

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Investors looking for stocks in the Chemical - Diversified sector might want to consider either Arkema SA (ARKAY - Free Report) or FMC (FMC - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Right now, Arkema SA is sporting a Zacks Rank of #2 (Buy), while FMC has a Zacks Rank of #5 (Strong Sell). This means that ARKAY's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors.

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.

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.

ARKAY currently has a forward P/E ratio of 13.61, while FMC has a forward P/E of 13.97. We also note that ARKAY has a PEG ratio of 0.48. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. FMC currently has a PEG ratio of 1.27.

Another notable valuation metric for ARKAY is its P/B ratio of 1.51. 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, FMC has a P/B of 3.92.

These are just a few of the metrics contributing to ARKAY's Value grade of A and FMC's Value grade of C.

ARKAY 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 ARKAY is likely the superior value option right now.


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