Investors interested in Banks - Foreign stocks are likely familiar with UBS (UBS) and Nu Holdings Ltd. (NU). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Both UBS and Nu Holdings Ltd. have a Zacks Rank of #2 (Buy) right now. Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. But this is only part of the picture for value investors.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether 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.
UBS currently has a forward P/E ratio of 16.21, while NU has a forward P/E of 28.51. We also note that UBS has a PEG ratio of 0.66. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. NU currently has a PEG ratio of 0.83.
Another notable valuation metric for UBS is its P/B ratio of 1.35. 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, NU has a P/B of 8.08.
These are just a few of the metrics contributing to UBS's Value grade of B and NU's Value grade of C.
Both UBS and NU are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that UBS is the superior value option right now.
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UBS Group AG (UBS): Free Stock Analysis Report Nu Holdings Ltd. (NU): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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