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Gerdau S.A. (GGB) - free report >>
Usinas Siderurgicas de Minas Gerais SA (USNZY) - free report >>
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Gerdau S.A. (GGB) - free report >>
Usinas Siderurgicas de Minas Gerais SA (USNZY) - free report >>
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USNZY vs. GGB: Which Stock Should Value Investors Buy Now?
Investors interested in Steel - Producers stocks are likely familiar with Usinas Siderurgicas de Minas Gerais SA (USNZY - Free Report) and Gerdau (GGB - 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.
Both Usinas Siderurgicas de Minas Gerais SA and Gerdau have a Zacks Rank of # 2 (Buy) right now. This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. 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.
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.
USNZY currently has a forward P/E ratio of 4.53, while GGB has a forward P/E of 6.40. We also note that USNZY has a PEG ratio of 0.28. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. GGB currently has a PEG ratio of 0.30.
Another notable valuation metric for USNZY is its P/B ratio of 0.37. 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 1.35.
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.