Yahoo Finance EMN vs. APD: Which Stock Is the Better Value Option?
Investors with an interest in Chemical - Diversified stocks have likely encountered both Eastman Chemical (EMN) and Air Products and Chemicals (APD). But which of these two stocks presents investors with the better value opportunity right now? Let's 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 is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Right now, Eastman Chemical is sporting a Zacks Rank of #2 (Buy), while Air Products and Chemicals has a Zacks Rank of #4 (Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that EMN is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.
EMN currently has a forward P/E ratio of 14.41, while APD has a forward P/E of 32.45. We also note that EMN has a PEG ratio of 0.81. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. APD currently has a PEG ratio of 3.96.
Another notable valuation metric for EMN is its P/B ratio of 2.65. 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, APD has a P/B of 4.95.
Based on these metrics and many more, EMN holds a Value grade of B, while APD has a Value grade of C.
EMN sticks out from APD in both our Zacks Rank and Style Scores models, so value investors will likely feel that EMN is the better option right now.
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Eastman Chemical Company (EMN) : Free Stock Analysis Report
Air Products and Chemicals, Inc. (APD) : Free Stock Analysis Report
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