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HUN vs. FMC: Which Stock Should Value Investors Buy Now?

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Investors interested in Chemical - Diversified stocks are likely familiar with Huntsman (HUN - Free Report) and FMC (FMC - 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, Huntsman is sporting a Zacks Rank of #1 (Strong Buy), while FMC has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that HUN likely has seen a stronger improvement to its earnings outlook than FMC has recently. But this is just one piece of the puzzle for value investors.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when 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.

HUN currently has a forward P/E ratio of 8.20, while FMC has a forward P/E of 15.54. We also note that HUN has a PEG ratio of 0.66. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. FMC currently has a PEG ratio of 1.41.

Another notable valuation metric for HUN is its P/B ratio of 1.64. 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, FMC has a P/B of 4.85.

These metrics, and several others, help HUN earn a Value grade of B, while FMC has been given a Value grade of C.

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


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