RNLSY vs. SZKMY: Which Stock Should Value Investors Buy Now?

In this article:

Investors with an interest in Automotive - Foreign stocks have likely encountered both RENAULT SA (RNLSY) and SUZUKI MOTOR CP (SZKMY). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Right now, RENAULT SA is sporting a Zacks Rank of #2 (Buy), while SUZUKI MOTOR CP has a Zacks Rank of #4 (Sell). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that RNLSY has an improving earnings outlook. 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.

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.

RNLSY currently has a forward P/E ratio of 5.32, while SZKMY has a forward P/E of 16.77. We also note that RNLSY has a PEG ratio of 0.78. 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. SZKMY currently has a PEG ratio of 3.90.

Another notable valuation metric for RNLSY is its P/B ratio of 0.39. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, SZKMY has a P/B of 1.33.

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

RNLSY sticks out from SZKMY in both our Zacks Rank and Style Scores models, so value investors will likely feel that RNLSY is the better 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
 
RENAULT SA (RNLSY) : Free Stock Analysis Report
 
SUZUKI MOTOR CP (SZKMY) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.

Advertisement