Investors looking for stocks in the Steel - Producers sector might want to consider either Usinas Siderurgicas de Minas Gerais SA (USNZY Quick QuoteUSNZY - Free Report) or Gerdau (GGB Quick QuoteGGB - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 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.

Both Usinas Siderurgicas de Minas Gerais SA and Gerdau have a Zacks Rank of # 2 (Buy) right now. 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. However, value investors will care about much more than just this.

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.

USNZY currently has a forward P/E ratio of 4.44, while GGB has a forward P/E of 6.02. We also note that USNZY has a PEG ratio of 0.27. 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. GGB currently has a PEG ratio of 0.28.

Another notable valuation metric for USNZY is its P/B ratio of 0.36. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, GGB has a P/B of 1.27.

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

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