Investors interested in stocks from the Chemical - Specialty sector have probably already heard of Israel Chemicals (ICL) and Novozymes AS (NVZMY). 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Israel Chemicals and Novozymes AS 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 ICL 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 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.
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.
ICL currently has a forward P/E ratio of 18.66, while NVZMY has a forward P/E of 41.65. We also note that ICL has a PEG ratio of 0.90. 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. NVZMY currently has a PEG ratio of 9.05.
Another notable valuation metric for ICL is its P/B ratio of 2.27. 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, NVZMY has a P/B of 9.62.
These metrics, and several others, help ICL earn a Value grade of B, while NVZMY has been given a Value grade of D.
ICL stands above NVZMY thanks to its solid earnings outlook, and based on these valuation figures, we also feel that ICL is the superior value option right now.
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Israel Chemicals Shs (ICL) : Free Stock Analysis Report
Novozymes AS (NVZMY) : Free Stock Analysis Report
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