Investors with an interest in Banks - Foreign stocks have likely encountered both Woori Bank (WF) and Canadian Imperial Bank (CM). 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.
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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, both Woori Bank and Canadian Imperial Bank are holding a Zacks Rank of #2 (Buy). 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 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.
WF currently has a forward P/E ratio of 6.35, while CM has a forward P/E of 12.18. We also note that WF has a PEG ratio of 1.01. 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. CM currently has a PEG ratio of 1.55.
Another notable valuation metric for WF is its P/B ratio of 0.54. 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, CM has a P/B of 1.71.
These metrics, and several others, help WF earn a Value grade of A, while CM has been given a Value grade of C.
Both WF and CM are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that WF is the superior value option right now.
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Today, See These 5 Potential Home Runs >>Woori Bank (WF) : Free Stock Analysis Report
Canadian Imperial Bank of Commerce (CM) : 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.
