Investors interested in Chemical - Diversified stocks are likely familiar with Brenntag AG (BNTGY - Free Report) and Nissan Chemical Industries, Ltd. (NNCHY - 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.
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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, Brenntag AG has a Zacks Rank of #2 (Buy), while Nissan Chemical Industries, Ltd. has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that BNTGY has an improving earnings outlook. But this is just one piece of the puzzle for value investors.
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.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
BNTGY currently has a forward P/E ratio of 15.06, while NNCHY has a forward P/E of 22.18. We also note that BNTGY has a PEG ratio of 1.67. 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. NNCHY currently has a PEG ratio of 2.22.
Another notable valuation metric for BNTGY is its P/B ratio of 2.07. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, NNCHY has a P/B of 4.36.
These are just a few of the metrics contributing to BNTGY's Value grade of A and NNCHY's Value grade of C.
BNTGY stands above NNCHY thanks to its solid earnings outlook, and based on these valuation figures, we also feel that BNTGY is the superior value option right now.