Investors with an interest in Banks - Foreign stocks have likely encountered both Mitsubishi UFJ (MUFG Quick QuoteMUFG - Free Report) and Bank of Nova Scotia (BNS Quick QuoteBNS - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

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.

Currently, Mitsubishi UFJ has a Zacks Rank of #2 (Buy), while Bank of Nova Scotia has a Zacks Rank of #4 (Sell). This means that MUFG's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.

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.

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.

MUFG currently has a forward P/E ratio of 8.23, while BNS has a forward P/E of 8.99. We also note that MUFG has a PEG ratio of 0.82. 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. BNS currently has a PEG ratio of 2.07.

Another notable valuation metric for MUFG is its P/B ratio of 0.63. 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, BNS has a P/B of 1.20.

These metrics, and several others, help MUFG earn a Value grade of B, while BNS has been given a Value grade of D.

MUFG 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 MUFG is likely the superior value option right now.