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

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Investors looking for stocks in the Chemical - Diversified sector might want to consider either Dow Inc. (DOW - Free Report) or Air Liquide (AIQUY - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? 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 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 #2 (Buy), while Air Liquide has a Zacks Rank of #4 (Sell). Investors should feel comfortable knowing that DOW likely has seen a stronger improvement to its earnings outlook than AIQUY has recently. But this is just one piece of the puzzle for value investors.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.

DOW currently has a forward P/E ratio of 6.89, while AIQUY has a forward P/E of 25.41. We also note that DOW has a PEG ratio of 0.25. 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. AIQUY currently has a PEG ratio of 3.99.

Another notable valuation metric for DOW is its P/B ratio of 2.71. 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, AIQUY has a P/B of 3.23.

Based on these metrics and many more, DOW holds a Value grade of A, while AIQUY has a Value grade of C.

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


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