FBP or DBSDY: Which Is the Better Value Stock Right Now?
Investors with an interest in Banks - Foreign stocks have likely encountered both First BanCorp (FBP) and DBS Group Holdings Ltd (DBSDY). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
First BanCorp and DBS Group Holdings Ltd are both sporting a Zacks Rank of #2 (Buy) right now. This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. 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.
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.
FBP currently has a forward P/E ratio of 11.73, while DBSDY has a forward P/E of 18.32. We also note that FBP has a PEG ratio of 1.51. 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. DBSDY currently has a PEG ratio of 2.14.
Another notable valuation metric for FBP is its P/B ratio of 2.16. 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, DBSDY has a P/B of 3.23.
Based on these metrics and many more, FBP holds a Value grade of B, while DBSDY has a Value grade of F.
Both FBP and DBSDY are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that FBP is the superior value option right now.
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See Stocks Now >>First BanCorp. (FBP) : Free Stock Analysis Report
DBS Group Holdings Ltd (DBSDY) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
