Back to top

Image: Bigstock

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

Read MoreHide Full Article

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.

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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Unilever NV and Clorox are sporting Zacks Ranks of #2 (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 UN has an improving earnings outlook. But this is just one piece of the puzzle for value investors.

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.

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 20.22, while CLX has a forward P/E of 23.95. We also note that UN has a PEG ratio of 3.30. 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. CLX currently has a PEG ratio of 3.78.

Another notable valuation metric for UN is its P/B ratio of 6.17. 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, CLX has a P/B of 28.51.

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

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


See More Zacks Research for These Tickers


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


The Clorox Company (CLX) - free report >>

Published in