Subscribe to Entrepreneur for $5
Subscribe

OLN or APD: Which Is the Better Value Stock Right Now?

OLN vs. APD: Which Stock Is the Better Value Option?

By
This story originally appeared on Zacks

Investors interested in stocks from the Chemical - Diversified sector have probably already heard of Olin (OLN) and Air Products and Chemicals (APD). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

- Zacks

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Right now, Olin is sporting a Zacks Rank of #1 (Strong Buy), while Air Products and Chemicals has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that OLN likely has seen a stronger improvement to its earnings outlook than APD has recently. 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.

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.

OLN currently has a forward P/E ratio of 6.80, while APD has a forward P/E of 27.84. We also note that OLN has a PEG ratio of 0.12. 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. APD currently has a PEG ratio of 2.63.

Another notable valuation metric for OLN is its P/B ratio of 3.92. 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, APD has a P/B of 4.61.

These are just a few of the metrics contributing to OLN's Value grade of A and APD's Value grade of C.

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



Investor Alert: Legal Marijuana Looking for big gains?

Now is the time to get in on a young industry primed to skyrocket from $13.5 billion in 2021 to an expected $70.6 billion by 2028.

After a clean sweep of 6 election referendums in 5 states, pot is now legal in 36 states plus D.C. Federal legalization is expected soon and that could kick start an even greater bonanza for investors. Zacks Investment Research has recently closed pot stocks that have shot up as high as +147.0%

You’re invited to immediately check out Zacks’ Marijuana Moneymakers: An Investor’s Guide. It features a timely Watch List of pot stocks and ETFs with exceptional growth potential.

Today, Download Marijuana Moneymakers FREE >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

 

Olin Corporation (OLN): Free Stock Analysis Report

 

Air Products and Chemicals, Inc. (APD): Free Stock Analysis Report

 

To read this article on Zacks.com click here.

 

Zacks Investment Research