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OLN or RDSMY: Which Is the Better Value Stock Right Now?

Zacks Equity Research
·2-min read

Investors with an interest in Chemical - Diversified stocks have likely encountered both Olin (OLN) and Koninklijke DSM NV (RDSMY). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Olin has a Zacks Rank of #2 (Buy), while Koninklijke DSM NV has a Zacks Rank of #4 (Sell) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that OLN 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.

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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.

OLN currently has a forward P/E ratio of 6.13, while RDSMY has a forward P/E of 36.86. We also note that OLN has a PEG ratio of 0.12. 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. RDSMY currently has a PEG ratio of 2.52.

Another notable valuation metric for OLN is its P/B ratio of 3.45. 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, RDSMY has a P/B of 4.57.

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

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


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Olin Corporation (OLN) : Free Stock Analysis Report
 
Koninklijke DSM NV (RDSMY) : Free Stock Analysis Report
 
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