ARKAY vs. FMC: Which Stock Is the Better Value Option?

Investors looking for stocks in the Chemical - Diversified sector might want to consider either Arkema SA (ARKAY) or FMC (FMC). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. 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, Arkema SA has a Zacks Rank of #2 (Buy), while FMC has a Zacks Rank of #5 (Strong Sell). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that ARKAY has an improving earnings outlook. But this is just one piece of the puzzle 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.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

ARKAY currently has a forward P/E ratio of 12.90, while FMC has a forward P/E of 14.42. We also note that ARKAY has a PEG ratio of 0.44. 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. FMC currently has a PEG ratio of 1.31.

Another notable valuation metric for ARKAY is its P/B ratio of 1.51. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, FMC has a P/B of 4.03.

These metrics, and several others, help ARKAY earn a Value grade of A, while FMC has been given a Value grade of C.

ARKAY stands above FMC thanks to its solid earnings outlook, and based on these valuation figures, we also feel that ARKAY is the superior value option right now.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.