NWG vs. NRDBY: Which Stock Should Value Investors Buy Now?

NRDBY NWG

Investors looking for stocks in the Banks - Foreign sector might want to consider either NatWest Group (NWG - Free Report) or Nordea Bank AB (NRDBY - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, both NatWest Group and Nordea Bank AB are holding 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 just one piece of the puzzle for value investors.

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.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

NWG currently has a forward P/E ratio of 7.63, while NRDBY has a forward P/E of 8.96. We also note that NWG has a PEG ratio of 0.28. 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. NRDBY currently has a PEG ratio of 1.25.

Another notable valuation metric for NWG is its P/B ratio of 0.62. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, NRDBY has a P/B of 1.07.

These are just a few of the metrics contributing to NWG's Value grade of A and NRDBY's Value grade of D.

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

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