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BCS or TD: Which Is the Better Value Stock Right Now?

Investors interested in stocks from the Banks - Foreign sector have probably already heard of Barclays (BCS) and Toronto-Dominion Bank (TD). But which of these two stocks presents investors with the better value opportunity right now? 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.

Right now, Barclays is sporting a Zacks Rank of #1 (Strong Buy), while Toronto-Dominion Bank has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that BCS likely has seen a stronger improvement to its earnings outlook than TD has recently. 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.

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.

BCS currently has a forward P/E ratio of 7.22, while TD has a forward P/E of 9.90. We also note that BCS has a PEG ratio of 0.36. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. TD currently has a PEG ratio of 1.29.

Another notable valuation metric for BCS is its P/B ratio of 0.39. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, TD has a P/B of 1.64.

These metrics, and several others, help BCS earn a Value grade of A, while TD has been given a Value grade of C.

BCS 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 BCS is likely the superior value option right now.

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Barclays PLC (BCS): Free Stock Analysis Report

Toronto Dominion Bank (The) (TD): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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