Australia markets close in 36 minutes
  • ALL ORDS

    7,539.50
    +36.00 (+0.48%)
     
  • ASX 200

    7,337.10
    +35.60 (+0.49%)
     
  • AUD/USD

    0.6845
    +0.0049 (+0.72%)
     
  • OIL

    80.76
    +0.78 (+0.98%)
     
  • GOLD

    1,821.50
    +11.90 (+0.66%)
     
  • BTC-AUD

    25,153.85
    +186.18 (+0.75%)
     
  • CMC Crypto 200

    407.83
    +6.41 (+1.60%)
     
  • AUD/EUR

    0.6467
    +0.0019 (+0.30%)
     
  • AUD/NZD

    1.0630
    +0.0041 (+0.39%)
     
  • NZX 50

    11,677.75
    +35.90 (+0.31%)
     
  • NASDAQ

    11,994.26
    -47.64 (-0.40%)
     
  • FTSE

    7,556.23
    -2.26 (-0.03%)
     
  • Dow Jones

    34,429.88
    +34.88 (+0.10%)
     
  • DAX

    14,529.39
    +39.09 (+0.27%)
     
  • Hang Seng

    19,320.62
    +645.27 (+3.46%)
     
  • NIKKEI 225

    27,795.85
    +17.95 (+0.06%)
     

NWG vs. NRDBY: Which Stock Should Value Investors Buy Now?

Investors looking for stocks in the Banks - Foreign sector might want to consider either NatWest Group (NWG) or Nordea Bank AB (NRDBY). But which of these two stocks presents investors with the better value opportunity right now? Let's 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, both NatWest Group and Nordea Bank AB are holding a Zacks Rank of # 2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. But this is just one piece of the puzzle 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.

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.

NWG currently has a forward P/E ratio of 7.63, while NRDBY has a forward P/E of 8.96. We also note that NWG has a PEG ratio of 0.28. 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. NRDBY currently has a PEG ratio of 1.25.

Another notable valuation metric for NWG is its P/B ratio of 0.62. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, NRDBY has a P/B of 1.07.

These are just a few of the metrics contributing to NWG's Value grade of A and NRDBY's Value grade of D.

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


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
NatWest Group plc (NWG) : Free Stock Analysis Report
 
Nordea Bank AB (NRDBY) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research