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SVNLY or BSAC: Which Is the Better Value Stock Right Now?

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Investors interested in stocks from the Banks - Foreign sector have probably already heard of Svenska Handelsbanken Ab Publ (SVNLY - Free Report) and Banco Santander-Chile (BSAC - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's 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.

Svenska Handelsbanken Ab Publ has a Zacks Rank of #2 (Buy), while Banco Santander-Chile has a Zacks Rank of #5 (Strong Sell) right now. Investors should feel comfortable knowing that SVNLY likely has seen a stronger improvement to its earnings outlook than BSAC has recently. But this is only part of the picture for value investors.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when 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.

SVNLY currently has a forward P/E ratio of 9.31, while BSAC has a forward P/E of 10.45. We also note that SVNLY has a PEG ratio of 2.25. 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. BSAC currently has a PEG ratio of 2.37.

Another notable valuation metric for SVNLY is its P/B ratio of 1.11. 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, BSAC has a P/B of 1.86.

These are just a few of the metrics contributing to SVNLY's Value grade of B and BSAC's Value grade of D.

SVNLY 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 SVNLY is likely the superior value option right now.


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