Investors interested in Cosmetics stocks are likely familiar with Helen of Troy (HELE) and Estee Lauder (EL). 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Currently, Helen of Troy has a Zacks Rank of #2 (Buy), while Estee Lauder has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that HELE 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 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.

HELE currently has a forward P/E ratio of 9.21, while EL has a forward P/E of 55.40. We also note that HELE has a PEG ratio of 1.84. 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 5.87.

Another notable valuation metric for HELE is its P/B ratio of 0.93. 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, EL has a P/B of 5.90.

These are just a few of the metrics contributing to HELE's Value grade of A and EL's Value grade of D.

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

Helen of Troy Limited (HELE) : Free Stock Analysis Report

The Estee Lauder Companies Inc. (EL) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research