Back to top

Image: Bigstock

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

Read MoreHide Full Article

Investors with an interest in Cosmetics stocks have likely encountered both Nu Skin Enterprises (NUS - Free Report) and Estee Lauder (EL - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Nu Skin Enterprises and Estee Lauder are sporting Zacks Ranks of #1 (Strong Buy) and #4 (Sell), 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 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 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.

NUS currently has a forward P/E ratio of 16.91, while EL has a forward P/E of 45.16. We also note that NUS has a PEG ratio of 3.02. 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. EL currently has a PEG ratio of 3.78.

Another notable valuation metric for NUS is its P/B ratio of 3.31. 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, EL has a P/B of 19.63.

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

NUS has seen stronger estimate revision activity and sports more attractive valuation metrics than EL, so it seems like value investors will conclude that NUS is the superior option right now.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


The Estee Lauder Companies Inc. (EL) - free report >>

Nu Skin Enterprises, Inc. (NUS) - free report >>

Published in