Investors interested in Banks - Foreign stocks are likely familiar with Santander Mexico (BSMX) and DNB Bank ASA (DNBBY). But which of these two companies is the best option for those looking for undervalued stocks? 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, both Santander Mexico and DNB Bank ASA are sporting a Zacks Rank of # 2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. But this is only part of the picture for value investors.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.
BSMX currently has a forward P/E ratio of 6.32, while DNBBY has a forward P/E of 9.56. We also note that BSMX has a PEG ratio of 0.69. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. DNBBY currently has a PEG ratio of 0.85.
Another notable valuation metric for BSMX is its P/B ratio of 0.90. 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, DNBBY has a P/B of 0.96.
These are just a few of the metrics contributing to BSMX's Value grade of B and DNBBY's Value grade of D.
Both BSMX and DNBBY are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that BSMX is the superior value option right now.
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Grupo Financiero Santander Mexico S.A. B. de C.V. (BSMX): Free Stock Analysis Report
DNB Bank ASA (DNBBY): Free Stock Analysis Report
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