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CE vs. DSEY: Which Stock Should Value Investors Buy Now?

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Investors looking for stocks in the Chemical - Specialty sector might want to consider either Celanese (CE - Free Report) or Diversey Holdings, Ltd. . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. 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.

Right now, Celanese is sporting a Zacks Rank of #2 (Buy), while Diversey Holdings, Ltd. has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that CE likely has seen a stronger improvement to its earnings outlook than DSEY has recently. But this is just one factor that value investors are interested in.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.

CE currently has a forward P/E ratio of 9.12, while DSEY has a forward P/E of 26.65. We also note that CE has a PEG ratio of 0.37. 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. DSEY currently has a PEG ratio of 1.88.

Another notable valuation metric for CE is its P/B ratio of 4.10. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, DSEY has a P/B of 7.62.

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

CE 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 CE is likely the superior value option right now.


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