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SCGLY vs. CM: Which Stock Is the Better Value Option?

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Investors interested in Banks - Foreign stocks are likely familiar with Societe Generale Group (SCGLY - Free Report) and Canadian Imperial Bank (CM - Free Report) . 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, Societe Generale Group is sporting a Zacks Rank of #2 (Buy), while Canadian Imperial Bank has a Zacks Rank of #4 (Sell). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that SCGLY has an improving earnings outlook. But this is just one factor that value investors are interested in.

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.

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.

SCGLY currently has a forward P/E ratio of 6.63, while CM has a forward P/E of 9.16. We also note that SCGLY has a PEG ratio of 2.10. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. CM currently has a PEG ratio of 3.

Another notable valuation metric for SCGLY is its P/B ratio of 0.35. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, CM has a P/B of 1.13.

Based on these metrics and many more, SCGLY holds a Value grade of A, while CM has a Value grade of C.

SCGLY is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that SCGLY is likely the superior value option right now.


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Societe Generale Group (SCGLY) - free report >>

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