AVNT or AIQUY: Which Is the Better Value Stock Right Now?

Investors with an interest in Chemical - Diversified stocks have likely encountered both Avient (AVNT) and Air Liquide (AIQUY). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Currently, Avient has a Zacks Rank of #2 (Buy), while Air Liquide has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that AVNT is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.

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.

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.

AVNT currently has a forward P/E ratio of 12.55, while AIQUY has a forward P/E of 28.86. We also note that AVNT has a PEG ratio of 1.22. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. AIQUY currently has a PEG ratio of 2.55.

Another notable valuation metric for AVNT is its P/B ratio of 1.36. 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 4.18.

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

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

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research