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PPG or NVZMY: Which Is the Better Value Stock Right Now?

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Investors with an interest in Chemical - Specialty stocks have likely encountered both PPG Industries (PPG - Free Report) and Novozymes A/S (NVZMY - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

PPG Industries has a Zacks Rank of #2 (Buy), while Novozymes A/S has a Zacks Rank of #4 (Sell) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that PPG has an improving earnings outlook. But this is just one factor that value investors are interested in.

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 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.

PPG currently has a forward P/E ratio of 17.09, while NVZMY has a forward P/E of 23.83. We also note that PPG has a PEG ratio of 1.03. 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. NVZMY currently has a PEG ratio of 13.54.

Another notable valuation metric for PPG is its P/B ratio of 3.88. 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 4.63.

These metrics, and several others, help PPG earn a Value grade of B, while NVZMY has been given a Value grade of D.

PPG is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that PPG is likely the superior value option right now.


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