Investors interested in Chemical – Diversified stocks are likely familiar with Dow Inc. (DOW) and FMC (FMC). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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.

Right now, Dow Inc. is sporting a Zacks Rank of #2 (Buy), while FMC has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that DOW has an improving earnings outlook. However, value investors will care about much more than just this.

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.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

DOW currently has a forward P/E ratio of 9.25, while FMC has a forward P/E of 15.65. We also note that DOW has a PEG ratio of 0.34. 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. FMC currently has a PEG ratio of 1.42.

Another notable valuation metric for DOW is its P/B ratio of 3.18. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, FMC has a P/B of 4.76.

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

DOW is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that DOW is likely the superior value option right now.

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