Investors interested in Mining - Miscellaneous stocks are likely familiar with Nexa Resources S.A. (NEXA) and Anglo American (NGLOY). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. 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.
Nexa Resources S.A. has a Zacks Rank of #1 (Strong Buy), while Anglo American has a Zacks Rank of #2 (Buy) right now. Investors should feel comfortable knowing that NEXA likely has seen a stronger improvement to its earnings outlook than NGLOY has recently. 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.
NEXA currently has a forward P/E ratio of 4.88, while NGLOY has a forward P/E of 22.33. We also note that NEXA has a PEG ratio of 0.31. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. NGLOY currently has a PEG ratio of 0.51.
Another notable valuation metric for NEXA is its P/B ratio of 1.19. 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, NGLOY has a P/B of 2.5.
These metrics, and several others, help NEXA earn a Value grade of A, while NGLOY has been given a Value grade of C.
NEXA stands above NGLOY thanks to its solid earnings outlook, and based on these valuation figures, we also feel that NEXA is the superior value option right now.
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Nexa Resources S.A. (NEXA) : Free Stock Analysis Report
Anglo American (NGLOY) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
