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AXTA or CSWI: Which Is the Better Value Stock Right Now?

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Investors interested in stocks from the Chemical - Specialty sector have probably already heard of Axalta Coating Systems (AXTA - Free Report) and CSW Industrials (CSWI - Free Report) . 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Axalta Coating Systems and CSW Industrials are both sporting a Zacks Rank of # 2 (Buy) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. 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.

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.

AXTA currently has a forward P/E ratio of 16.76, while CSWI has a forward P/E of 37.10. We also note that AXTA has a PEG ratio of 0.81. 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. CSWI currently has a PEG ratio of 2.47.

Another notable valuation metric for AXTA is its P/B ratio of 4.18. 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, CSWI has a P/B of 7.48.

These are just a few of the metrics contributing to AXTA's Value grade of B and CSWI's Value grade of F.

Both AXTA and CSWI are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that AXTA is the superior value option right now.


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