Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 6 stocks made the list for top value stocks in the Chemicals industry. Those looking for value stocks to add to their portfolio may want to use this list as a starting point for further investment research.

Why Focus on Undervalued Chemicals Stocks?

Value investors seek to buy stocks at a discount to their intrinsic value. Long-term returns show that such strategies are advantageous. Value stocks, as a group, tend to outperform growth stocks over extended periods of time. Typically, value investors perform financial analysis of numerous metrics, don’t follow the herd and are long-term investors.

AAII’s A+ Investor Value Grade is derived from a stock’s Value Score. The Value Score is the percentile rank of the average of the percentile ranks of the price-to-sales ratio, price-earnings ratio, enterprise-value-to-EBITDA (EV/EBITDA) ratio, shareholder yield, price-to-book-value ratio and price-to-free-cash-flow ratio. The score is variable, meaning it can consider all six ratios or, should any of the six ratios not be valid, the remaining ratios that are valid. To be assigned a Value Score, stocks must have a valid (non-null) ratio and corresponding ranking for at least two of the six valuation ratios.

What Goes Into AAII’s Value Grade?

Stock evaluation requires access to huge amounts of data as well as the knowledge and time to sift through it all, make sense of financial ratios, read income statements and analyze recent stock movement. AAII created A+ Investor, a robust data suite that condenses data research in an actionable and customizable way suitable for investors of all knowledge levels, to help investors with that task.

AAII’s proprietary stock grades come with A+ Investor. These offer intuitive A–F grades for more than just value. It is possible for a stock to appear cheap based on one valuation metric but appear expensive on another. It is also possible for one valuation ratio to be associated with outperforming stocks during certain periods of time but not others. Some stocks may even have null values for certain metrics like the price-earnings ratio or the price-to-book ratio but not others. An example of this would be a company with losses instead of profits or a negative book value because of heavy borrowing. Negative earnings or book value result in non-meaningful ratios that are left blank or null.

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6 Undervalued Chemicals Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 6 undervalued stocks in the Chemicals industry for Monday, October 14, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Chemicals industry median.

The Value Grade is assigned based on how each stock’s composite valuation compares to all other stocks.

The process for assigning grades starts with each variable for a given stock. The percentile rankings for all valid ratios that a stock has are calculated. So, for instance, a stock could have a price-to-book ranking in the 43rd percentile, a price-earnings ranking in the 67th percentile, a price-to-sales ranking in the 23rd percentile, etc. Then, those rankings are averaged for each stock. (A minimum of two valid variables are required, though all six will be used if available.)

Once the average of the individual variables is calculated, that average is ranked against all stocks. Put another way, each stock’s composite valuation is compared to all other stocks. These ranks are then sorted into quintiles from the cheapest 20% (a grade of A) to the most expensive 20% (a grade of F).

As always, we recommend that you conduct proper due diligence and research before investing in any security. We also suggest that investors utilize numerous grades, not just value, when it comes to deciding whether a company is a good fit for their allocation needs.

American Biltrite Inc.’s Value Grade

Value Grade:

American Biltrite Inc., together with its subsidiaries, provides tape, jewelry, flooring, and rubber products worldwide. The company produces and offers pressure sensitive tapes, films, and protective sheeting under the American Biltrite and Ideal brands, which are used in various markets, such as automotive and transportation; construction; shoe/footwear; graphic arts, print, and signage; and various other industrial and consumer applications. It also manufactures and distributes commercial flooring primarily for healthcare, educational, and institutional sectors; and performance sheet rubber in North America, as well as designs and supplies fashion jewelry to department stores under the brands of Guess, T Tahari, Robert Rose, Berry, and Jessica McClintock. The company sells its tape products through sales organizations, distributors, and select manufacturers’ representatives. American Biltrite Inc. was founded in 1908 and is based in Wellesley Hills, Massachusetts.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

American Biltrite Inc. has a Value Score of 97, which is considered to be undervalued.

When you look at American Biltrite Inc.’s price-to-sales ratio at 0.03 compared to the industry median at 1.40, this company has a lower price relative to revenue compared to its peers. This could make American Biltrite Inc.’s stock more attractive for value investors.

Now, let’s assess American Biltrite Inc.’s EV/EBITDA ratio, also known as enterprise multiple. At 13.9, when compared to the industry median of 11.9, the company may be considered overvalued in relation to its peers. Value investors could use the enterprise multiple to identify stocks that are considered overvalued or undervalued relative to their industry.

Shareholder yield is the sum of a stock’s dividend yield (paid over previous 12 months minus special dividends) and the percentage of net share buybacks over the previous 12 months. American Biltrite Inc.’s shareholder yield is higher than its industry median ratio of 1.40%. Value investors may look for an attractive shareholder yield because it can be a powerful tool for identifying if the company has a good management team.

As one of the most common value metrics, the price-to-book ratio evaluates a company’s current market price relative to its book value. American Biltrite Inc.’s price-to-book ratio is lower than its industry median ratio of 1.69. This could make American Biltrite Inc. more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at American Biltrite Inc.’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. American Biltrite Inc.’s price-to-free-cash-flow ratio is lower than its industry median ratio of 22.05. This could make American Biltrite Inc. more attractive because the lower P/FCF ratio indicates that American Biltrite Inc. is undervalued. The P/FCF ratio metric can also be viewed over a long-term time frame to see if the company's cash flow to share price value is generally improving or worsening.

China Green Agriculture, Inc.’s Value Grade

Value Grade:

China Green Agriculture, Inc., through its subsidiaries, engages in the research, development, production, and sale of various fertilizers, agricultural products, and bitcoin in the People’s Republic of China and the United States. The company operates through four segments: Jinong (Fertilizer Production); Gufeng (Fertilizer Production); Yuxing (Agricultural Products Production); and Antaeus (Bitcoin). It offers humic acid-based compound, blended, organic compound, slow-release, compound, highly concentrated water-soluble, and mixed organic-inorganic compound fertilizers, as well as develops, produces, and distributes agricultural products, such as fruits, vegetables, flowers, and colored seedlings. The company also produces and sells bitcoins. The company also markets its fertilizer products to private wholesalers and retailers of agricultural farm products. The company sells its decorative flowers to end-users, such as flower shops, luxury hotels, and government agencies; fruits and vegetables to supermarkets and upscale restaurants; and seedlings to city planning departments. As of June 30, 2023, the company operated a network of 1,328 distributors covering 22 provinces, 4 autonomous regions, and 4 central government-controlled municipalities in China. The company also exports its products through contracted distributors to various countries, including India and Africa. China Green Agriculture, Inc. was incorporated in 1987 and is based in Xi'an, the People’s Republic of China.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

China Green Agriculture, Inc. has a Value Score of 92, which is considered to be undervalued.

China Green Agriculture, Inc.’s price-to-book ratio is higher than its peers. This could make China Green Agriculture, Inc. less attractive for value investors when compared to the industry median at 1.69.

You can read more about China Green Agriculture, Inc.’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Flexible Solutions International, Inc.’s Value Grade

Value Grade:

Flexible Solutions International, Inc., together with its subsidiaries, develops, manufactures, and markets specialty chemicals that slow the evaporation of water in Canada, the United States, and internationally. The company operates in two segments, Energy and Water Conservation Products, and Biodegradable Polymers. The company offers thermal polyaspartates (TPAs) for oilfields to reduce scale and corrosion in various water systems; and for the agricultural industry to reduce fertilizer crystallization before, during, and after application, as well as to prevent crystal formation between fertilizer and minerals present in the soil. It also provides TPAs for irrigation to prevent early plugging of drip irrigation ports, reduce maintenance costs, and lengthen the life of equipment; TPAs for cleaning products to prevents the re-deposition of dirt onto the surfaces; and TPAs as additives for household laundry detergents, consumer care products, and pesticides. In addition, the company offers nitrogen conservation products for agriculture that slow down nitrogen loss from fields. Further, it provides HEATSAVR, a chemical product for use in swimming pools and spas that forms a thin and transparent layer on the water’s surface; and WATERSAVR to reduce water evaporation in reservoirs, potable water storage tanks, livestock watering ponds, aqueducts, canals, and irrigation ditches, as well as for lawn and turf care, and potted and bedding plants. The company was incorporated in 1991 and is headquartered in Taber, Canada.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Flexible Solutions International, Inc. has a Value Score of 70, which is considered to be undervalued.

Flexible Solutions International, Inc.’s price-earnings ratio is 16.3 compared to the industry median at 27.0. This means that it has a lower price relative to its earnings compared to its peers. This makes Flexible Solutions International, Inc. more attractive for value investors.

Flexible Solutions International, Inc.’s price-to-book ratio is higher than its peers. This could make Flexible Solutions International, Inc. less attractive for value investors when compared to the industry median at 1.69.

You can read more about Flexible Solutions International, Inc.’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Koppers Holdings Inc.’s Value Grade

Value Grade:

Koppers Holdings Inc. provides treated wood products, wood preservation chemicals, and carbon compounds in the United States, Australasia, Europe, and internationally. The company operates through Railroad and Utility Products and Services (RUPS), Performance Chemicals (PC), and Carbon Materials and Chemicals (CMC) segments. The RUPS segment procures and treats crossties, switch ties, and various types of lumber used for railroad bridges and crossings. It also provides rail joint bars to join rails together for railroads; transmission and distribution poles for electric and telephone utilities; and pilings. This segment provides railroad services, such as engineering, design, repair, and inspection services for railroad bridges. The PC segment develops, manufactures, and markets copper-based wood preservatives, including micronized copper azole, micronized pigments, alkaline copper quaternary, amine copper azole, and chromated copper arsenate for decking, fencing, utility poles, construction lumber and timbers, and various agricultural uses; and supplies fire-retardant chemicals for pressure treatment of wood primarily in commercial construction. The CMC segment manufactures creosote for the treatment of wood or as a feedstock in the production of carbon black; carbon pitch, a raw material used in the production of aluminum and steel; naphthalene for use as a feedstock in the production of phthalic anhydride and as a surfactant in the production of concrete; phthalic anhydride for the production of plasticizers, polyester resins, and alkyd paints; and carbon black feedstock for use in the production of carbon black. It serves the railroad, specialty chemical, utility, residential lumber, agriculture, aluminum, steel, rubber, and construction sectors. Koppers Holdings Inc. was founded in 1988 and is based in Pittsburgh, Pennsylvania.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Koppers Holdings Inc. has a Value Score of 84, which is considered to be undervalued.

Koppers Holdings Inc.’s price-earnings ratio is 10.2 compared to the industry median at 27.0. This means that it has a lower price relative to its earnings compared to its peers. This makes Koppers Holdings Inc. more attractive for value investors.

Koppers Holdings Inc.’s price-to-book ratio is higher than its peers. This could make Koppers Holdings Inc. less attractive for value investors when compared to the industry median at 1.69.

You can read more about Koppers Holdings Inc.’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

LyondellBasell Industries N.V.’s Value Grade

Value Grade:

LyondellBasell Industries N.V. operates as a chemical company in the United States, Germany, Mexico, Italy, Poland, France, Japan, China, the Netherlands, and internationally. The company operates in six segments: Olefins and Polyolefins—Americas; Olefins and Polyolefins—Europe, Asia, International; Intermediates and Derivatives; Advanced Polymer Solutions; Refining; and Technology. It produces and markets olefins and co-products, polyethylene, and polypropylene; and propylene oxide and derivatives; oxyfuels and related products; and intermediate chemicals, such as styrene monomer, acetyls, ethylene oxide, and ethylene glycol. In addition, the company produce and markets compounding and solutions including polypropylene compounds, engineered plastics, masterbatches, engineered composites, colors and powders, and advanced polymers including catalloy and polybutene-1; and refines heavy, high-sulfur crude oil and other crude oils, as well as refined products, including gasoline and distillates. Further, it develops and licenses chemical and polyolefin process technologies; manufactures and sells polyolefin catalysts; and serves food packaging, home furnishings, automotive components, and paints and coatings applications. LyondellBasell Industries N.V. was incorporated in 2009 and is headquartered in Houston, Texas.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

LyondellBasell Industries N.V. has a Value Score of 66, which is considered to be undervalued.

LyondellBasell Industries N.V.’s price-earnings ratio is 13.2 compared to the industry median at 27.0. This means that it has a lower price relative to its earnings compared to its peers. This makes LyondellBasell Industries N.V. more attractive for value investors.

LyondellBasell Industries N.V.’s price-to-book ratio is lower than its peers. This could make LyondellBasell Industries N.V. more attractive for value investors when compared to the industry median at 1.69.

You can read more about LyondellBasell Industries N.V.’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Methanex Corporation’s Value Grade

Value Grade:

Methanex Corporation produces and supplies methanol in China, Europe, the United States, South America, South Korea, Canada, and Asia. The company also purchases methanol produced by others under methanol offtake contracts and on the spot market. In addition, it owns and leases storage and terminal facilities. The company owns and manages a fleet of approximately 30 ocean-going vessels. It serves chemical and petrochemical producers. Methanex Corporation was incorporated in 1968 and is headquartered in Vancouver, Canada.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Methanex Corporation has a Value Score of 72, which is considered to be undervalued.

Methanex Corporation’s price-earnings ratio is 19.7 compared to the industry median at 27.0. This means that it has a lower price relative to its earnings compared to its peers. This makes Methanex Corporation more attractive for value investors.

Methanex Corporation’s price-to-book ratio is higher than its peers. This could make Methanex Corporation less attractive for value investors when compared to the industry median at 1.69.

You can read more about Methanex Corporation’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Other Chemicals Stock Grades

Value is just one of the five Stock Grades included in our A+ Investor service. AAII members can see the top-graded stocks—those with grades of A or B for value, growth, momentum, earnings estimate revisions and quality—on the A+ Stock Grades Screener.

Also, if you want full access to all of AAII’s premium services, you can subscribe to one convenient bundled plan called AAII Platinum where you can try out A+ Investor, AAII Dividend Investing, the Stock Superstars Report, Growth Investing and VMQ Stocks. With the other premium services, you can dive deep into additional metrics, portfolios, commentary and information about Chemicals stocks as well as other industrys.

Choosing Which of the 6 Best Chemicals Stocks Is Right for You

Choosing which value stocks to invest in will ultimately depend on your individual goals and allocation; however, comparing similar value stocks in the same industry can help you analyze which might be better investments for you in the long run. So, let’s take a look at the Value Grade for all of our stocks.

• American Biltrite Inc. stock has a Value Grade of A.
• China Green Agriculture, Inc. stock has a Value Grade of A.
• Flexible Solutions International, Inc. stock has a Value Grade of B.
• Koppers Holdings Inc. stock has a Value Grade of A.
• LyondellBasell Industries N.V. stock has a Value Grade of B.
• Methanex Corporation stock has a Value Grade of B.

Now that you have a bit more background about each of the 6 undervalued stocks in the Chemicals industry as well as their overall grades, it’s time for you to conduct additional research to see if these could fit your portfolio needs based on your goals and risk tolerance. AAII can help you figure out both and identify which investments align with what works best for you.

We do so through a program of education that teaches you to invest for yourself and become an effective manager of your own wealth—no more relying on others for your financial independence. You can rely on AAII for timeless articles on financial planning and stock-picking, unbiased research and actionable analysis that makes you a better investor.

A+ Investor adds to that qualitative teaching by giving you a powerful data suite that helps you whittle down investment decisions to find stocks, exchange-traded funds (ETFs) or mutual funds that meet your needs.

Additional Resources About Chemicals Stocks

Want to learn more about Chemicals stocks to see if they could be the right investment for you? Check out some additional resources and articles to help you on your financial journey.

• 6 Undervalued Chemicals Stocks for Monday, October 14
• 5 Undervalued Chemicals Stocks for Friday, October 11
• 6 Undervalued Chemicals Stocks for Thursday, October 10
• 6 Undervalued Chemicals Stocks for Wednesday, October 09

AAII Disclaimer

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