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

Investors with an interest in Mining - Miscellaneous stocks have likely encountered both Nexa Resources S.A. (NEXA) and Teck Resources Ltd (TECK). 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Nexa Resources S.A. and Teck Resources Ltd are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that NEXA has an improving earnings outlook. But this is only part of the picture 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 grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

NEXA currently has a forward P/E ratio of 11.29, while TECK has a forward P/E of 27.23. We also note that NEXA has a PEG ratio of 0.32. 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. TECK currently has a PEG ratio of 0.54.

Another notable valuation metric for NEXA is its P/B ratio of 1.33. 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, TECK has a P/B of 1.38.

These are just a few of the metrics contributing to NEXA's Value grade of A and TECK's Value grade of C.

NEXA 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 NEXA is likely the superior value option right now.

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

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