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

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Investors with an interest in Banks - Foreign stocks have likely encountered both Erste Group Bank AG (EBKDY - Free Report) and National Australia Bank Ltd. (NABZY - 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.

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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Erste Group Bank AG has a Zacks Rank of #2 (Buy), while National Australia Bank Ltd. has a Zacks Rank of #4 (Sell) 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. However, value investors will care about much more than just this.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.

EBKDY currently has a forward P/E ratio of 4.87, while NABZY has a forward P/E of 11.89. We also note that EBKDY has a PEG ratio of 0.54. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. NABZY currently has a PEG ratio of 1.85.

Another notable valuation metric for EBKDY is its P/B ratio of 0.61. 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, NABZY has a P/B of 1.42.

Based on these metrics and many more, EBKDY holds a Value grade of B, while NABZY has a Value grade of D.

EBKDY 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 EBKDY is likely the superior value option right now.


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

Erste Group Bank AG (EBKDY) - free report >>

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