NEXA or NGLOY: Which Is the Better Value Stock Right Now?

Investors interested in stocks from the Mining - Miscellaneous sector have probably already heard of Nexa Resources S.A. (NEXA) and Anglo American (NGLOY). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Nexa Resources S.A. has a Zacks Rank of #1 (Strong Buy), while Anglo American has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that NEXA has an improving earnings outlook. But this is just one factor that value investors are interested in.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

NEXA currently has a forward P/E ratio of 4.98, while NGLOY has a forward P/E of 21.63. We also note that NEXA has a PEG ratio of 0.15. 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 0.49.

Another notable valuation metric for NEXA is its P/B ratio of 1.23. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, NGLOY has a P/B of 2.4.

These metrics, and several others, help NEXA earn a Value grade of A, while NGLOY has been given a Value grade of C.

NEXA sticks out from NGLOY in both our Zacks Rank and Style Scores models, so value investors will likely feel that NEXA is the better option right now.

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

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