Back to top

Image: Bigstock

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

Read MoreHide Full Article

Investors with an interest in Chemical - Specialty stocks have likely encountered both Celanese (CE - Free Report) and Novozymes AS (NVZMY - Free Report) . 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, both Celanese and Novozymes AS are holding a Zacks Rank of # 2 (Buy). Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. However, value investors will care about much more than just this.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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 8.95, while NVZMY has a forward P/E of 45.15. We also note that CE has a PEG ratio of 0.32. 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. NVZMY currently has a PEG ratio of 8.50.

Another notable valuation metric for CE is its P/B ratio of 4.18. 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, NVZMY has a P/B of 10.37.

Based on these metrics and many more, CE holds a Value grade of A, while NVZMY has a Value grade of D.

Both CE and NVZMY are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that CE is the superior value option right now.


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Celanese Corporation (CE) - free report >>

Novozymes AS (NVZMY) - free report >>

Published in