Chemours (NYSE:CC) and PPG Industries (NYSE:PPG) are likely names that investors interested in companies from the Chemical – Diversified sector are already familiar with. Which of these two companies, however, offers investors a superior value opportunity at the moment? Let’s look more closely.
There are several methods for finding value companies, but we have discovered that the best returns come from combining a high Zacks Rank with a solid grade in the Value category of our Style Scores methodology. The well-established Zacks Rank highlights businesses with encouraging estimate revision tendencies, and our Style Scores spotlight stocks with particular characteristics.
Currently, PPG Industries has a Zacks Rank of #4 (Sell), while Chemours has a Zacks Rank of #2 (Buy). Investors should rest easy knowing that CC’s profits outlook has probably recently improved more than PPG’s has. Value investors, though, will be far more concerned than just this.
In order to assess whether a company is cheap at the current levels of its share price, value investors also attempt to analyze a wide range of conventional numbers and measures.
The Style Rating Value grade takes into account a number of important fundamental measures, such as the well-known P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other crucial statistics that value investors frequently employ.
CC and PPG Outlook
The forward P/E ratio for CC is currently 5.94, while the forward P/E for PPG is 18.34. We also observe that the PEG ratio for CC is 0.41. This number is comparable to the widely used P/E ratio, with the PEG ratio also taking into account the anticipated earnings growth rate of a company. PPG’s PEG ratio right now is 2.54.
The P/B ratio of 4.24 for Chemours is another noteworthy value indicator. The P/B ratio is a way to compare a stock’s market value to its book value, which is calculated by subtracting all of its assets from all of its liabilities. PPG has a P/B of 4.62 in contrast.
Chemours receives a Value grade of A thanks to these and other factors, while PPG receives a Value grade of D. Value investors may decide that Chemours is the better choice at this time because it has experienced more estimate revision activity than PPG and has more alluring valuation indicators.
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