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UNVR vs. ALB: 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 Univar or Albemarle (ALB - 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, Univar has a Zacks Rank of #2 (Buy), while Albemarle has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that UNVR is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture for value investors.

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.

UNVR currently has a forward P/E ratio of 13.73, while ALB has a forward P/E of 60.30. We also note that UNVR has a PEG ratio of 1.06. 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. ALB currently has a PEG ratio of 2.79.

Another notable valuation metric for UNVR is its P/B ratio of 1.99. 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, ALB has a P/B of 3.95.

These are just a few of the metrics contributing to UNVR's Value grade of B and ALB's Value grade of D.

UNVR sticks out from ALB in both our Zacks Rank and Style Scores models, so value investors will likely feel that UNVR is the better option right now.


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