The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the “Value” category. When paired with a high Zacks Rank, “A” grades in the Value category are among the strongest value stocks on the market today.
One company value investors might notice is LyondellBasell Industries (LYB). LYB is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 6.60, while its industry has an average P/E of 11.47. LYB’s Forward P/E has been as high as 8.91 and as low as 4.94, with a median of 6.18, all within the past year.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. LYB has a P/S ratio of 0.75. This compares to its industry’s average P/S of 0.84.
Finally, investors should note that LYB has a P/CF ratio of 5. This metric focuses on a firm’s operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company’s current P/CF looks solid when compared to its industry’s average P/CF of 6.12. Within the past 12 months, LYB’s P/CF has been as high as 10.51 and as low as 3.97, with a median of 4.95.
If you’re looking for another solid Chemical – Diversified value stock, take a look at Univar Solutions (UNVR). UNVR is a # 2 (Buy) stock with a Value score of A.
Shares of Univar Solutions are currently trading at a forward earnings multiple of 11.11 and a PEG ratio of 0.77 compared to its industry’s P/E and PEG ratios of 11.47 and 0.72, respectively.
UNVR’s price-to-earnings ratio has been as high as 18.33 and as low as 10.40, with a median of 13.63, while its PEG ratio has been as high as 2.14 and as low as 0.76, with a median of 1.05, all within the past year.
Univar Solutions also has a P/B ratio of 2.20 compared to its industry’s price-to-book ratio of 2.26. Over the past year, its P/B ratio has been as high as 2.53, as low as 1.80, with a median of 2.13.
These are only a few of the key metrics included in LyondellBasell Industries and Univar Solutions strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, LYB and UNVR look like an impressive value stock at the moment.
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LyondellBasell Industries N.V. (LYB) : Free Stock Analysis Report
Univar Solutions Inc. (UNVR) : Free Stock Analysis Report
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