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FUL vs. NVZMY: Which Stock Should Value Investors Buy Now?

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Investors interested in Chemical - Specialty stocks are likely familiar with H. B. Fuller (FUL - Free Report) and Novozymes A/S (NVZMY - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

H. B. Fuller has a Zacks Rank of #2 (Buy), while Novozymes A/S has a Zacks Rank of #4 (Sell) right now. Investors should feel comfortable knowing that FUL 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 also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

FUL currently has a forward P/E ratio of 12.88, while NVZMY has a forward P/E of 24.86. We also note that FUL has a PEG ratio of 0.81. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. NVZMY currently has a PEG ratio of 1.13.

Another notable valuation metric for FUL is its P/B ratio of 1.62. 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, NVZMY has a P/B of 2.29.

Based on these metrics and many more, FUL holds a Value grade of B, while NVZMY has a Value grade of D.

FUL has seen stronger estimate revision activity and sports more attractive valuation metrics than NVZMY, so it seems like value investors will conclude that FUL is the superior option right now.

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