BSAC vs. IBN: Which Stock Is the Better Value Option?

Investors looking for stocks in the Banks - Foreign sector might want to consider either Banco Santander-Chile (BSAC) or ICICI Bank Limited (IBN). 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.

Banco Santander-Chile and ICICI Bank Limited are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that BSAC is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture 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.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

BSAC currently has a forward P/E ratio of 10.76, while IBN has a forward P/E of 18.18. We also note that BSAC has a PEG ratio of 0.40. 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. IBN currently has a PEG ratio of 2.33.

Another notable valuation metric for BSAC is its P/B ratio of 1.46. 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, IBN has a P/B of 2.94.

These metrics, and several others, help BSAC earn a Value grade of B, while IBN has been given a Value grade of C.

BSAC has seen stronger estimate revision activity and sports more attractive valuation metrics than IBN, so it seems like value investors will conclude that BSAC is the superior option right now.

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Banco Santander Chile (BSAC) : Free Stock Analysis Report

ICICI Bank Limited (IBN) : Free Stock Analysis Report

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Zacks Investment Research

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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