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EBKDY vs. NABZY: Which Stock Is the Better Value Option?

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Investors looking for stocks in the Banks - Foreign sector might want to consider either Erste Group Bank AG (EBKDY - Free Report) or National Australia Bank Ltd. (NABZY - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive 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.

Erste Group Bank AG and National Australia Bank Ltd. are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that EBKDY is likely seeing its earnings outlook improve to a greater extent. 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.

EBKDY currently has a forward P/E ratio of 4.93, while NABZY has a forward P/E of 11.44. We also note that EBKDY has a PEG ratio of 0.55. 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. NABZY currently has a PEG ratio of 1.78.

Another notable valuation metric for EBKDY is its P/B ratio of 0.63. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, NABZY has a P/B of 1.36.

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

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


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National Australia Bank Ltd. (NABZY) - free report >>

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