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CBT vs. AIQUY: Which Stock Is the Better Value Option?

Investors interested in Chemical - Diversified stocks are likely familiar with Cabot (CBT) and Air Liquide (AIQUY). 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Cabot and Air Liquide are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that CBT likely has seen a stronger improvement to its earnings outlook than AIQUY has recently. 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.

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The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

CBT currently has a forward P/E ratio of 15.25, while AIQUY has a forward P/E of 27.73. We also note that CBT has a PEG ratio of 1.06. 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. AIQUY currently has a PEG ratio of 2.46.

Another notable valuation metric for CBT is its P/B ratio of 3.77. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, AIQUY has a P/B of 3.84.

These metrics, and several others, help CBT earn a Value grade of A, while AIQUY has been given a Value grade of D.

CBT has seen stronger estimate revision activity and sports more attractive valuation metrics than AIQUY, so it seems like value investors will conclude that CBT is the superior option right now.

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Cabot Corporation (CBT) : Free Stock Analysis Report

Air Liquide (AIQUY) : Free Stock Analysis Report

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Zacks Investment Research