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ARKAY vs. FMC: 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 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.

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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, Arkema SA has a Zacks Rank of #2 (Buy), while FMC has a Zacks Rank of #5 (Strong Sell). Investors should feel comfortable knowing that ARKAY likely has seen a stronger improvement to its earnings outlook than FMC has recently. 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 11.79, while FMC has a forward P/E of 13.70. We also note that ARKAY has a PEG ratio of 0.42. 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. FMC currently has a PEG ratio of 1.25.

Another notable valuation metric for ARKAY is its P/B ratio of 1.38. 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, FMC has a P/B of 3.84.

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

ARKAY has seen stronger estimate revision activity and sports more attractive valuation metrics than FMC, so it seems like value investors will conclude that ARKAY is the superior option right now.


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