Investors interested in stocks from the Banks - Foreign sector have probably already heard of Toronto-Dominion Bank (TD) and DBS Group Holdings Ltd (DBSDY). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, both Toronto-Dominion Bank and DBS Group Holdings Ltd are holding a Zacks Rank of #2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. 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 grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
TD currently has a forward P/E ratio of 14.56, while DBSDY has a forward P/E of 15.10. We also note that TD has a PEG ratio of 1.30. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. DBSDY currently has a PEG ratio of 12.69.
Another notable valuation metric for TD is its P/B ratio of 1.9. 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 2.5.
These metrics, and several others, help TD earn a Value grade of B, while DBSDY has been given a Value grade of F.
Both TD and DBSDY are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that TD is the superior value option right now.
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See This Stock Now for Free >>Toronto Dominion Bank (The) (TD) : Free Stock Analysis Report
DBS Group Holdings Ltd (DBSDY) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
