BSBR or BSAC: Which Is the Better Value Stock Right Now?
Investors interested in Banks - Foreign stocks are likely familiar with Banco Santander-Brazil (BSBR) and Banco Santander-Chile (BSAC). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, Banco Santander-Brazil is sporting a Zacks Rank of #2 (Buy), while Banco Santander-Chile has a Zacks Rank of #3 (Hold). This means that BSBR's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst 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.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
BSBR currently has a forward P/E ratio of 10.24, while BSAC has a forward P/E of 14.51. We also note that BSBR has a PEG ratio of 0.99. 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. BSAC currently has a PEG ratio of 1.22.
Another notable valuation metric for BSBR is its P/B ratio of 1.50. 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, BSAC has a P/B of 2.66.
These are just a few of the metrics contributing to BSBR's Value grade of A and BSAC's Value grade of D.
BSBR sticks out from BSAC in both our Zacks Rank and Style Scores models, so value investors will likely feel that BSBR is the better option right now.
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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.