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

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Investors interested in Chemical - Specialty stocks are likely familiar with Celanese (CE - Free Report) and Diversey Holdings, Ltd. . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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.

Celanese has a Zacks Rank of #2 (Buy), while Diversey Holdings, Ltd. has a Zacks Rank of #4 (Sell) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that CE has an improving earnings outlook. But this is just one factor that value investors are interested in.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.

CE currently has a forward P/E ratio of 9.25, while DSEY has a forward P/E of 28.80. We also note that CE has a PEG ratio of 0.33. 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. DSEY currently has a PEG ratio of 2.03.

Another notable valuation metric for CE is its P/B ratio of 4.32. 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, DSEY has a P/B of 8.20.

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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