Back to top

Image: Bigstock

AXTA or CSWI: Which Is the Better Value Stock Right Now?

Read MoreHide Full Article

Investors with an interest in Chemical - Specialty stocks have likely encountered both Axalta Coating Systems (AXTA - Free Report) and CSW Industrials (CSWI - 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.

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 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.

Currently, Axalta Coating Systems has a Zacks Rank of #2 (Buy), while CSW Industrials has a Zacks Rank of #3 (Hold). This means that AXTA'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 also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.

AXTA currently has a forward P/E ratio of 16.63, while CSWI has a forward P/E of 29.40. We also note that AXTA has a PEG ratio of 1.02. 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. CSWI currently has a PEG ratio of 1.96.

Another notable valuation metric for AXTA is its P/B ratio of 3.90. 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, CSWI has a P/B of 6.30.

These are just a few of the metrics contributing to AXTA's Value grade of B and CSWI's Value grade of D.

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


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Axalta Coating Systems Ltd. (AXTA) - free report >>

CSW Industrials, Inc. (CSWI) - free report >>

Published in