Yahoo Finance LIN vs. NVZMY: Which Stock Is the Better Value Option?
Investors interested in stocks from the Chemical - Specialty sector have probably already heard of Linde (LIN) and Novozymes A/S (NVZMY). 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.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. 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, both Linde and Novozymes A/S are sporting a Zacks Rank of # 2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. 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.
LIN currently has a forward P/E ratio of 26.09, while NVZMY has a forward P/E of 27.76. We also note that LIN has a PEG ratio of 2.61. 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. NVZMY currently has a PEG ratio of 8.76.
Another notable valuation metric for LIN is its P/B ratio of 4.30. 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 5.91.
These metrics, and several others, help LIN earn a Value grade of B, while NVZMY has been given a Value grade of C.
Both LIN and NVZMY are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that LIN is the superior value option right now.
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Linde PLC (LIN) : Free Stock Analysis Report
Novozymes A/S (NVZMY) : Free Stock Analysis Report
