BAP or NU: Which Is the Better Value Stock Right Now?

Investors interested in stocks from the Banks - Foreign sector have probably already heard of Credicorp (BAP) and Nu Holdings Ltd. (NU). 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.

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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Both Credicorp and Nu Holdings Ltd. 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. But this is just one piece of the puzzle for value investors.

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.

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.

BAP currently has a forward P/E ratio of 10.91, while NU has a forward P/E of 28.43. We also note that BAP has a PEG ratio of 0.70. 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 0.80.

Another notable valuation metric for BAP is its P/B ratio of 2.9. 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, NU has a P/B of 7.62.

These are just a few of the metrics contributing to BAP's Value grade of B and NU's Value grade of D.

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

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This article originally published on Zacks Investment Research (zacks.com).

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