Yahoo Finance LIN or ECL: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Chemical - Specialty sector might want to consider either Linde (LIN) or Ecolab (ECL). 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.
Right now, Linde is sporting a Zacks Rank of #2 (Buy), while Ecolab 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 LIN has an improving earnings outlook. 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.
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.
LIN currently has a forward P/E ratio of 25.68, while ECL has a forward P/E of 33.62. We also note that LIN has a PEG ratio of 2.57. 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. ECL currently has a PEG ratio of 2.65.
Another notable valuation metric for LIN is its P/B ratio of 4.20. 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, ECL has a P/B of 6.48.
Based on these metrics and many more, LIN holds a Value grade of B, while ECL has a Value grade of C.
LIN is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that LIN is likely the superior value option right now.
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Linde PLC (LIN) : Free Stock Analysis Report
Ecolab Inc. (ECL) : Free Stock Analysis Report
