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ICL vs. NVZMY: Which Stock Is the Better Value Option?

Zacks Equity Research
·2-min read

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

Right now, Israel Chemicals is sporting a Zacks Rank of #2 (Buy), while Novozymes AS has a Zacks Rank of #3 (Hold). 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. But this is just one piece of the puzzle for value investors.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.

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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.

ICL currently has a forward P/E ratio of 14.66, while NVZMY has a forward P/E of 45.63. We also note that ICL has a PEG ratio of 0.61. 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 9.13.

Another notable valuation metric for ICL is its P/B ratio of 2.01. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, NVZMY has a P/B of 10.56.

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

ICL sticks out from NVZMY in both our Zacks Rank and Style Scores models, so value investors will likely feel that ICL is the better option right now.


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ICL Group Ltd (ICL) : Free Stock Analysis Report
 
Novozymes AS (NVZMY) : Free Stock Analysis Report
 
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Zacks Investment Research