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

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Investors interested in stocks from the Chemical - Diversified sector have probably already heard of Chemours (CC - Free Report) and FMC (FMC - Free Report) . 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.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. 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.

Chemours and FMC are sporting Zacks Ranks of #1 (Strong Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that CC likely has seen a stronger improvement to its earnings outlook than FMC has recently. 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 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.

CC currently has a forward P/E ratio of 6.03, while FMC has a forward P/E of 14.23. We also note that CC has a PEG ratio of 0.45. 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. FMC currently has a PEG ratio of 1.29.

Another notable valuation metric for CC is its P/B ratio of 4.19. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, FMC has a P/B of 4.45.

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

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


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