Investors interested in Chemical - Specialty stocks are likely familiar with Axalta Coating Systems (AXTA) and Hawkins (HWKN). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
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, Axalta Coating Systems has a Zacks Rank of #2 (Buy), while Hawkins has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that AXTA has an improving earnings outlook. However, value investors will care about much more than just this.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
AXTA currently has a forward P/E ratio of 18.07, while HWKN has a forward P/E of 30.69. We also note that AXTA has a PEG ratio of 0.84. 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. HWKN currently has a PEG ratio of 4.38.
Another notable valuation metric for AXTA is its P/B ratio of 4.34. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, HWKN has a P/B of 5.96.
Based on these metrics and many more, AXTA holds a Value grade of B, while HWKN has a Value grade of D.
AXTA is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that AXTA is likely the superior value option right now.
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Hawkins, Inc. (HWKN) : Free Stock Analysis Report
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