Investors interested in stocks from the Banks - Foreign sector have probably already heard of BNP Paribas SA (BNPQY) and National Australia Bank Ltd. (NABZY). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Both BNP Paribas SA and National Australia Bank Ltd. have a Zacks Rank of #2 (Buy) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is just one piece of the puzzle 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.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

BNPQY currently has a forward P/E ratio of 7.64, while NABZY has a forward P/E of 19.55. We also note that BNPQY has a PEG ratio of 0.63. 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. NABZY currently has a PEG ratio of 5.63.

Another notable valuation metric for BNPQY is its P/B ratio of 0.78. 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, NABZY has a P/B of 2.45.

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

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

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BNP Paribas SA (BNPQY):Free Stock Analysis Report

National Australia Bank Ltd. (NABZY):Free Stock Analysis Report

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

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