Investors interested in stocks from the Mining – Miscellaneous sector have probably already heard of Norsk Hydro ASA (NHYDY) and Anglo American (NGLOY). But which of these two stocks presents investors with the better value opportunity right now? Let's 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.

Norsk Hydro ASA has a Zacks Rank of #1 (Strong Buy), while Anglo American has a Zacks Rank of #2 (Buy) right now. Investors should feel comfortable knowing that NHYDY likely has seen a stronger improvement to its earnings outlook than NGLOY has recently. But this is just one factor that value investors are interested in.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies 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.

NHYDY currently has a forward P/E ratio of 9.08, while NGLOY has a forward P/E of 32.75. We also note that NHYDY has a PEG ratio of 0.26. 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. NGLOY currently has a PEG ratio of 3.16.

Another notable valuation metric for NHYDY is its P/B ratio of 1.58. 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, NGLOY has a P/B of 2.13.

Based on these metrics and many more, NHYDY holds a Value grade of A, while NGLOY has a Value grade of C.

NHYDY sticks out from NGLOY in both our Zacks Rank and Style Scores models, so value investors will likely feel that NHYDY is the better option right now.

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Norsk Hydro ASA (NHYDY) : Free Stock Analysis Report

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

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