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

Zacks Equity Research
·2-min read

Investors interested in Mining - Miscellaneous stocks are likely familiar with Nexa Resources S.A. (NEXA) and MP Materials Corp. (MP). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive 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.

Right now, Nexa Resources S.A. is sporting a Zacks Rank of #1 (Strong Buy), while MP Materials Corp. has a Zacks Rank of #3 (Hold). 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 just one factor that value investors are interested in.

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.

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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 2.74, while MP has a forward P/E of 24.88. We also note that NEXA has a PEG ratio of 0.50. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. MP currently has a PEG ratio of 1.36.

Another notable valuation metric for NEXA is its P/B ratio of 0.58. 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, MP has a P/B of 5.78.

Based on these metrics and many more, NEXA holds a Value grade of A, while MP has a Value grade of D.

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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Nexa Resources S.A. (NEXA) : Free Stock Analysis Report
 
MP Materials Corp. (MP) : Free Stock Analysis Report
 
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Zacks Investment Research