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ICL or LTHM: Which Is the Better Value Stock Right Now?

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Investors with an interest in Chemical - Specialty stocks have likely encountered both Israel Chemicals (ICL - Free Report) and Livent . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Israel Chemicals has a Zacks Rank of #2 (Buy), while Livent has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that ICL is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle 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.

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.

ICL currently has a forward P/E ratio of 11.89, while LTHM has a forward P/E of 59.02. We also note that ICL has a PEG ratio of 0.46. 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. LTHM currently has a PEG ratio of 1.31.

Another notable valuation metric for ICL is its P/B ratio of 2.81. 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, LTHM has a P/B of 4.98.

Based on these metrics and many more, ICL holds a Value grade of B, while LTHM has a Value grade of D.

ICL stands above LTHM thanks to its solid earnings outlook, and based on these valuation figures, we also feel that ICL is the superior value option right now.


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