Investors interested in Chemical - Specialty stocks are likely familiar with Celanese (CE) and Ingevity Corporation (NGVT). But which of these two stocks presents investors with the better value opportunity right now? Let's 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Celanese and Ingevity Corporation are both sporting a Zacks Rank of # 2 (Buy) right now. This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. But this is only part of the picture for value investors.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when 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.
CE currently has a forward P/E ratio of 9.76, while NGVT has a forward P/E of 23.16. We also note that CE has a PEG ratio of 0.98. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. NGVT currently has a PEG ratio of 1.93.
Another notable valuation metric for CE is its P/B ratio of 3.85. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, NGVT has a P/B of 13.96.
Based on these metrics and many more, CE holds a Value grade of B, while NGVT has a Value grade of D.
Both CE and NGVT are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that CE is the superior value option right now.
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Celanese Corporation (CE) : Free Stock Analysis Report
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