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UN or CLX: Which Is the Better Value Stock Right Now?

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Investors looking for stocks in the Soap and Cleaning Materials sector might want to consider either Unilever NV or Clorox (CLX - 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.

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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Unilever NV and Clorox are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that UN is likely seeing its earnings outlook improve to a greater extent. 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 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.

UN currently has a forward P/E ratio of 21.19, while CLX has a forward P/E of 23.42. We also note that UN has a PEG ratio of 2.98. 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. CLX currently has a PEG ratio of 3.11.

Another notable valuation metric for UN is its P/B ratio of 6.59. 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, CLX has a P/B of 26.49.

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

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


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