NUS vs. IPAR: Which Stock Should Value Investors Buy Now?

IPAR NUS

Investors interested in Cosmetics stocks are likely familiar with Nu Skin Enterprises (NUS - Free Report) and Inter Parfums (IPAR - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Nu Skin Enterprises and Inter Parfums are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that NUS has an improving earnings outlook. But this is just one piece of the puzzle for value investors.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks 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.

NUS currently has a forward P/E ratio of 12.91, while IPAR has a forward P/E of 37.72. We also note that NUS has a PEG ratio of 1.40. 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. IPAR currently has a PEG ratio of 3.02.

Another notable valuation metric for NUS is its P/B ratio of 2.80. 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, IPAR has a P/B of 3.77.

These metrics, and several others, help NUS earn a Value grade of A, while IPAR has been given a Value grade of D.

NUS is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that NUS is likely the superior value option right now.

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