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AXTA vs. NVZMY: Which Stock Is the Better Value Option?
Investors interested in Chemical - Specialty stocks are likely familiar with Axalta Coating Systems (AXTA - 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.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, Axalta Coating Systems has a Zacks Rank of #2 (Buy), while Novozymes AS has a Zacks Rank of #4 (Sell). Investors should feel comfortable knowing that AXTA likely has seen a stronger improvement to its earnings outlook than NVZMY has recently. However, value investors will care about much more than just this.
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.
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.
AXTA currently has a forward P/E ratio of 12.86, while NVZMY has a forward P/E of 35.31. We also note that AXTA has a PEG ratio of 0.77. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. NVZMY currently has a PEG ratio of 7.78.
Another notable valuation metric for AXTA is its P/B ratio of 3.58. 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, NVZMY has a P/B of 7.59.
Based on these metrics and many more, AXTA holds a Value grade of B, while NVZMY has a Value grade of D.
AXTA has seen stronger estimate revision activity and sports more attractive valuation metrics than NVZMY, so it seems like value investors will conclude that AXTA is the superior option right now.