We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
DOW vs. PPG: Which Stock Should Value Investors Buy Now?
Read MoreHide Full Article
Investors interested in stocks from the Chemical - Diversified sector have probably already heard of Dow Inc. (DOW - Free Report) and PPG Industries (PPG - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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.
Right now, Dow Inc. is sporting a Zacks Rank of #1 (Strong Buy), while PPG Industries 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 DOW has an improving earnings outlook. But this is just one piece of the puzzle 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 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.
DOW currently has a forward P/E ratio of 13.39, while PPG has a forward P/E of 21.88. We also note that DOW has a PEG ratio of 0.69. 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. PPG currently has a PEG ratio of 1.19.
Another notable valuation metric for DOW is its P/B ratio of 3.18. 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, PPG has a P/B of 6.94.
These are just a few of the metrics contributing to DOW's Value grade of B and PPG's Value grade of C.
DOW stands above PPG thanks to its solid earnings outlook, and based on these valuation figures, we also feel that DOW is the superior value option right now.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
DOW vs. PPG: Which Stock Should Value Investors Buy Now?
Investors interested in stocks from the Chemical - Diversified sector have probably already heard of Dow Inc. (DOW - Free Report) and PPG Industries (PPG - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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.
Right now, Dow Inc. is sporting a Zacks Rank of #1 (Strong Buy), while PPG Industries 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 DOW has an improving earnings outlook. But this is just one piece of the puzzle 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 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.
DOW currently has a forward P/E ratio of 13.39, while PPG has a forward P/E of 21.88. We also note that DOW has a PEG ratio of 0.69. 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. PPG currently has a PEG ratio of 1.19.
Another notable valuation metric for DOW is its P/B ratio of 3.18. 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, PPG has a P/B of 6.94.
These are just a few of the metrics contributing to DOW's Value grade of B and PPG's Value grade of C.
DOW stands above PPG thanks to its solid earnings outlook, and based on these valuation figures, we also feel that DOW is the superior value option right now.