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HUN vs. FMC: Which Stock Is the Better Value Option?

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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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Huntsman and FMC are sporting Zacks Ranks of #1 (Strong Buy) and #3 (Hold), respectively, right now. This means that HUN's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.

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.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

HUN currently has a forward P/E ratio of 8.09, while FMC has a forward P/E of 15.89. We also note that HUN has a PEG ratio of 0.65. 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 1.44.

Another notable valuation metric for HUN is its P/B ratio of 1.68. 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, FMC has a P/B of 4.96.

These are just a few of the metrics contributing to HUN's Value grade of A and FMC's Value grade of C.

HUN has seen stronger estimate revision activity and sports more attractive valuation metrics than FMC, so it seems like value investors will conclude that HUN is the superior option right now.


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