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EMN vs. AIQUY: Which Stock Should Value Investors Buy Now?

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Investors looking for stocks in the Chemical - Diversified sector might want to consider either Eastman Chemical (EMN - Free Report) or Air Liquide (AIQUY - 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, both Eastman Chemical and Air Liquide are holding a Zacks Rank of # 2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. 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.

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.

EMN currently has a forward P/E ratio of 10.47, while AIQUY has a forward P/E of 25.72. We also note that EMN has a PEG ratio of 2.17. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. AIQUY currently has a PEG ratio of 2.76.

Another notable valuation metric for EMN is its P/B ratio of 1.86. 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, AIQUY has a P/B of 3.48.

These metrics, and several others, help EMN earn a Value grade of A, while AIQUY has been given a Value grade of C.

Both EMN and AIQUY are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that EMN is the superior value option right now.


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