BBVA or CM: Which Is the Better Value Stock Right Now?
Investors interested in Banks - Foreign stocks are likely familiar with Banco Bilbao (BBVA) and Canadian Imperial Bank (CM). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive 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.
Banco Bilbao has a Zacks Rank of #2 (Buy), while Canadian Imperial Bank has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that BBVA has an improving earnings outlook. But this is just one factor that value investors are interested in.
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.
BBVA currently has a forward P/E ratio of 11.54, while CM has a forward P/E of 14.49. We also note that BBVA has a PEG ratio of 0.73. 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. CM currently has a PEG ratio of 1.09.
Another notable valuation metric for BBVA is its P/B ratio of 2.1. 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, CM has a P/B of 2.36.
These are just a few of the metrics contributing to BBVA's Value grade of A and CM's Value grade of D.
BBVA has seen stronger estimate revision activity and sports more attractive valuation metrics than CM, so it seems like value investors will conclude that BBVA is the superior option right now.
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Canadian Imperial Bank of Commerce (CM) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
