AXTA vs. NVZMY: Which Stock Should Value Investors Buy Now?
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Investors interested in stocks from the Chemical - Specialty sector have probably already heard of Axalta Coating Systems (AXTA) and Novozymes A/S (NVZMY). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great 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.
Currently, both Axalta Coating Systems and Novozymes A/S are holding a Zacks Rank of # 2 (Buy). 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 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.
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.
AXTA currently has a forward P/E ratio of 17.52, while NVZMY has a forward P/E of 39.57. We also note that AXTA has a PEG ratio of 0.85. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. NVZMY currently has a PEG ratio of 4.06.
Another notable valuation metric for AXTA is its P/B ratio of 4.37. 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, NVZMY has a P/B of 16.18.
These metrics, and several others, help AXTA earn a Value grade of B, while NVZMY has been given a Value grade of F.
Both AXTA and NVZMY are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that AXTA is the superior value option right now.
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Axalta Coating Systems Ltd. (AXTA) : Free Stock Analysis Report
Novozymes A/S (NVZMY) : Free Stock Analysis Report