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NEXA vs. MP: Which Stock Is the Better Value Option?

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Investors looking for stocks in the Mining - Miscellaneous sector might want to consider either Nexa Resources S.A. (NEXA - Free Report) or MP Materials Corp. (MP - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Both Nexa Resources S.A. and MP Materials Corp. have a Zacks Rank of # 1 (Strong Buy) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. However, value investors will care about much more than just this.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

NEXA currently has a forward P/E ratio of 3.90, while MP has a forward P/E of 47.05. We also note that NEXA has a PEG ratio of 3.42. 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. MP currently has a PEG ratio of 7.04.

Another notable valuation metric for NEXA is its P/B ratio of 0.74. 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, MP has a P/B of 9.66.

Based on these metrics and many more, NEXA holds a Value grade of A, while MP has a Value grade of F.

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


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