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MEOH vs. FMC: Which Stock Is the Better Value Option?

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Investors with an interest in Chemical - Diversified stocks have likely encountered both Methanex (MEOH - Free Report) and FMC (FMC - 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.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive 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.

Methanex and FMC are sporting Zacks Ranks of #1 (Strong Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that MEOH has an improving earnings outlook. But this is just one piece of the puzzle for value investors.

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.

MEOH currently has a forward P/E ratio of 10.77, while FMC has a forward P/E of 14.10. We also note that MEOH has a PEG ratio of 0.72. 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. FMC currently has a PEG ratio of 0.98.

Another notable valuation metric for MEOH is its P/B ratio of 3.04. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, FMC has a P/B of 3.83.

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

MEOH 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 MEOH is likely the superior value option right now.


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