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EBKDY vs. NABZY: Which Stock Is the Better Value Option?

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Investors interested in stocks from the Banks - Foreign sector have probably already heard of Erste Group Bank AG (EBKDY - Free Report) and National Australia Bank Ltd. (NABZY - Free Report) . 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 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, both Erste Group Bank AG and National Australia Bank Ltd. are sporting a Zacks Rank of # 2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. But this is only part of the picture for value investors.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.

EBKDY currently has a forward P/E ratio of 5.66, while NABZY has a forward P/E of 13.94. We also note that EBKDY has a PEG ratio of 0.56. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. NABZY currently has a PEG ratio of 4.03.

Another notable valuation metric for EBKDY is its P/B ratio of 0.68. 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, NABZY has a P/B of 1.67.

These metrics, and several others, help EBKDY earn a Value grade of B, while NABZY has been given a Value grade of F.

Both EBKDY and NABZY are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that EBKDY is the superior value option right now.


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National Australia Bank Ltd. (NABZY) - free report >>

Erste Group Bank AG (EBKDY) - free report >>

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