OLN or RDSMY: Which Is the Better Value Stock Right Now?
OLN vs. RDSMY: Which Stock Is the Better Value Option?
Investors interested in Chemical - Diversified stocks are likely familiar with Olin (OLN) and Koninklijke DSM NV (RDSMY). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Currently, Olin has a Zacks Rank of #2 (Buy), while Koninklijke DSM NV has a Zacks Rank of #3 (Hold). This means that OLN's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.
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 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.
OLN currently has a forward P/E ratio of 6.78, while RDSMY has a forward P/E of 35.56. We also note that OLN has a PEG ratio of 0.13. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. RDSMY currently has a PEG ratio of 2.59.
Another notable valuation metric for OLN is its P/B ratio of 3.75. 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, RDSMY has a P/B of 4.44.
Based on these metrics and many more, OLN holds a Value grade of A, while RDSMY has a Value grade of D.
OLN 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 OLN is likely the superior value option right now.
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