ARKAY or PPG: Which Is the Better Value Stock Right Now?
Investors interested in Chemical - Diversified stocks are likely familiar with Arkema SA (ARKAY) and PPG Industries (PPG). But which of these two companies is the best option for those looking for undervalued stocks? 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Arkema SA and PPG Industries are both sporting a Zacks Rank of # 2 (Buy) right now. Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. But this is just one factor that value investors are interested in.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
ARKAY currently has a forward P/E ratio of 15.49, while PPG has a forward P/E of 18.66. We also note that ARKAY has a PEG ratio of 0.76. 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. PPG currently has a PEG ratio of 1.15.
Another notable valuation metric for ARKAY is its P/B ratio of 1.42. 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, PPG has a P/B of 5.72.
These are just a few of the metrics contributing to ARKAY's Value grade of A and PPG's Value grade of C.
Both ARKAY and PPG are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that ARKAY is the superior value option right now.
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