Should Value Investors Buy BASF (BASFY) Stock?

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

BASF (BASFY) is a stock many investors are watching right now. BASFY is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 15.21 right now. For comparison, its industry sports an average P/E of 20.55. Over the past 52 weeks, BASFY's Forward P/E has been as high as 17.69 and as low as 11.55, with a median of 14.23.

Investors should also recognize that BASFY has a P/B ratio of 1.14. 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. This stock's P/B looks solid versus its industry's average P/B of 2.10. Within the past 52 weeks, BASFY's P/B has been as high as 1.31 and as low as 0.95, with a median of 1.12.

If you're looking for another solid Chemical - Diversified value stock, take a look at LyondellBasell Industries (LYB). LYB is a Zacks Rank of #2 (Buy) stock with a Value score of A.

LyondellBasell Industries is trading at a forward earnings multiple of 12.75 at the moment, with a PEG ratio of 2.64. This compares to its industry's average P/E of 20.55 and average PEG ratio of 0.61.

Over the last 12 months, LYB's P/E has been as high as 14.89, as low as 8.44, with a median of 11.25, and its PEG ratio has been as high as 5.19, as low as 0.67, with a median of 1.47.

LyondellBasell Industries sports a P/B ratio of 1.40 as well; this compares to its industry's price-to-book ratio of 2.10. In the past 52 weeks, LYB's P/B has been as high as 2.33, as low as 1.30, with a median of 1.78.

These are only a few of the key metrics included in BASF and LyondellBasell Industries strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, BASFY and LYB look like an impressive value stock at the moment.

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

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