Investors looking for stocks in the Chemical - Specialty sector might want to consider either Axalta Coating Systems (AXTA) or Novozymes A/S (NVZMY). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Axalta Coating Systems has a Zacks Rank of #2 (Buy), while Novozymes A/S has a Zacks Rank of #3 (Hold) right now. This means that AXTA's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture 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 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.

AXTA currently has a forward P/E ratio of 17.81, while NVZMY has a forward P/E of 34.48. We also note that AXTA has a PEG ratio of 0.83. 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. NVZMY currently has a PEG ratio of 3.54.

Another notable valuation metric for AXTA is its P/B ratio of 4.24. 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, NVZMY has a P/B of 14.10.

These metrics, and several others, help AXTA earn a Value grade of B, while NVZMY has been given a Value grade of F.

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

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Axalta Coating Systems Ltd. (AXTA) : Free Stock Analysis Report