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NUS vs. EL: Which Stock Is the Better Value Option?

Zacks Equity Research
·2 min read

Investors interested in Cosmetics stocks are likely familiar with Nu Skin Enterprises (NUS) and Estee Lauder (EL). 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.

Nu Skin Enterprises and Estee Lauder are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that NUS is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks 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.

NUS currently has a forward P/E ratio of 17.58, while EL has a forward P/E of 46.68. We also note that NUS has a PEG ratio of 2.57. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. EL currently has a PEG ratio of 3.90.

Another notable valuation metric for NUS is its P/B ratio of 3.56. 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, EL has a P/B of 20.28.

Based on these metrics and many more, NUS holds a Value grade of B, while EL has a Value grade of D.

NUS has seen stronger estimate revision activity and sports more attractive valuation metrics than EL, so it seems like value investors will conclude that NUS is the superior option right now.


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Nu Skin Enterprises, Inc. (NUS) : Free Stock Analysis Report
 
The Estee Lauder Companies Inc. (EL) : Free Stock Analysis Report
 
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Zacks Investment Research