Investors looking for stocks in the Banks - Foreign sector might want to consider either Bancolombia (CIB) or DBS Group Holdings Ltd (DBSDY). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Bancolombia and DBS Group Holdings Ltd are both sporting a Zacks Rank of # 2 (Buy) right now. Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. But this is only part of the picture for value investors.
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.
CIB currently has a forward P/E ratio of 5.36, while DBSDY has a forward P/E of 11.07. We also note that CIB has a PEG ratio of 1.83. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. DBSDY currently has a PEG ratio of 4.65.
Another notable valuation metric for CIB is its P/B ratio of 0.93. 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, DBSDY has a P/B of 1.89.
These are just a few of the metrics contributing to CIB's Value grade of B and DBSDY's Value grade of D.
Both CIB and DBSDY are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that CIB is the superior value option right now.
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