FUL vs. CSWI: Which Stock Is the Better Value Option?

Investors with an interest in Chemical - Specialty stocks have likely encountered both H. B. Fuller FUL and CSW Industrials CSWI. 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 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.

H. B. Fuller and CSW Industrials are both sporting a Zacks Rank of # 2 (Buy) right now. This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. But this is only part of the picture 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.

FUL currently has a forward P/E ratio of 17.97, while CSWI has a forward P/E of 36.10. We also note that FUL has a PEG ratio of 1.28. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. CSWI currently has a PEG ratio of 2.41.

Another notable valuation metric for FUL is its P/B ratio of 2.41. 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, CSWI has a P/B of 7.28.

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

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

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