It's been a pretty good year for the S&P 500 index (up 16.5% in 12 months), but the price recovery hasn't been universal, and companies like chemicals and materials company Celanese (CE 1.58%) and package delivery giant UPS (UPS -1.55%) have underperformed. Over the past year, both stocks are trading roughly flat. The reasons for the underperformance are understandable, but both companies are still solid performers, and that makes their stocks good values now. Long-term investors would be wise to take a closer look at these two top cyclical stocks.

1. Celanese

Nobody likes to see one of the companies in their portfolio report declining earnings amid a slowdown in end demand. And it's never good news when a company completes a multibillion-dollar acquisition precisely at the time when the market is weakening, as Celanese did with its $11 billion acquisition of the majority of DuPont's Mobility & Materials (M&M) business in November.

Celanese manufactures engineered polymers and acetyl products. These are intermediate chemicals used across vast swathes of industry and commerce. So while you might not have heard of the company before, you have probably used its products in construction, consumer and automotive applications, paints, etc. While that broad-based exposure is excellent when the economy is booming, it's harmful when growth is slowing and customers are looking to reduce inventory.

The latter is the situation now, with CEO Lori Ryerkerk lowering the company's full-year earnings guidance on the first-quarter earnings call from adjusted earnings of $12 to $13 to a new range of $11 to $12 and noting that "we are seeing the demand in the second quarter not build as quickly as we had thought at this time last quarter."

To be crystal clear, Celanese is a highly cyclical company, and prices for its materials can swing significantly in line with end demand. In addition, some of its end markets, such as construction products and automotive builds, are under pressure in 2023, so it's impossible to discount further earnings deterioration -- the Wall Street consensus is for adjusted earnings at the low end of the $11-to-$12 range.

Still, anything close to $11 will make Celanese look like an excellent value stock. For example, the current price of $114 per share would put the stock at 10.4 times 2023 earnings. That's not bad for a trough valuation for a cyclical company that's undergoing a natural correction from solid demand last year as the economy opened up.

Celanese is a good option for patient investors who can tolerate the potential for some bad news in the coming months.

Small business owners with parcels.

Image source: Getty Images.

2. UPS

Celanese and UPS are about as different as two businesses could be, but from an investment perspective, they share much in common. Just as Celanese's end demand is weakening due to a cyclical slowdown, UPS's volume demand is also slowing.

On the company's first-quarter earnings call in late April, CFO Brian Newman told investors that its U.S. domestic "average daily volume was down 5.4% year-over-year, primarily because volume in March moved lower than we expected." Meanwhile, in the international segment, activity in Asia "gradually recovered through the quarter, but at a slower pace than we anticipated."

The somewhat weaker-than-expected volumes reflect the slowing in the global economy, and consequently, management lowered its full-year revenue and earnings expectations. Back in January, management was expecting revenue of $97 billion to $99.4 billion and a consolidated adjusted operating margin of 12.8% to 13.6%. However, the new guidance calls for revenue and margin at the bottom ends of those ranges.

Still, just as with Celanese, it's important to put these figures into context. Wall Street has adjusted its expectations toward earnings of $10.74 for the full year, putting UPS on a forward multiple of 16.4 times earnings. That's higher than the multiple cited for Celanese above.

Still, it's worth noting that UPS has made some operational improvements in recent years -- not least its expansion into targeted growth areas like small and medium-sized businesses and healthcare. These underlying improvements have led to margin expansion, and when volumes eventually recover, UPS will be well-positioned to grow earnings and cash flow.

Meanwhile, investors will earn a 3.7% dividend yield while they wait.