Investors interested in stocks from the Banks - Foreign sector have probably already heard of The Bank of East Asia Ltd. (BKEAY) and National Australia Bank Ltd. (NABZY). But which of these two companies is the best option for those looking for undervalued stocks? 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

The Bank of East Asia Ltd. has a Zacks Rank of #2 (Buy), while National Australia Bank Ltd. has a Zacks Rank of #4 (Sell) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that BKEAY is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.

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.

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.

BKEAY currently has a forward P/E ratio of 6.25, while NABZY has a forward P/E of 14.37. We also note that BKEAY has a PEG ratio of 0.80. 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. NABZY currently has a PEG ratio of 7.64.

Another notable valuation metric for BKEAY is its P/B ratio of 0.25. 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 1.57.

These metrics, and several others, help BKEAY earn a Value grade of A, while NABZY has been given a Value grade of F.

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

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The Bank of East Asia Ltd. (BKEAY):Free Stock Analysis Report

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

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

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