BASFY vs. FMC: Which Stock Should Value Investors Buy Now?

Investors with an interest in Chemical - Diversified stocks have likely encountered both BASF SE (BASFY) and FMC (FMC). 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.

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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

BASF SE and FMC 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 BASFY is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.

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.

BASFY currently has a forward P/E ratio of 15.58, while FMC has a forward P/E of 16.55. We also note that BASFY has a PEG ratio of 1.20. 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 1.54.

Another notable valuation metric for BASFY is its P/B ratio of 1.63. 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, FMC has a P/B of 5.03.

Based on these metrics and many more, BASFY holds a Value grade of B, while FMC has a Value grade of C.

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

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