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ITUB or HDB: Which Is the Better Value Stock Right Now?
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Investors with an interest in Banks - Foreign stocks have likely encountered both Banco Itau (ITUB - Free Report) and HDFC Bank (HDB - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? 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.
Banco Itau has a Zacks Rank of #2 (Buy), while HDFC Bank has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that ITUB likely has seen a stronger improvement to its earnings outlook than HDB has recently. 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.
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.
ITUB currently has a forward P/E ratio of 8.12, while HDB has a forward P/E of 20.29. We also note that ITUB has a PEG ratio of 0.71. 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. HDB currently has a PEG ratio of 1.40.
Another notable valuation metric for ITUB is its P/B ratio of 1.52. 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, HDB has a P/B of 2.01.
Based on these metrics and many more, ITUB holds a Value grade of B, while HDB has a Value grade of D.
ITUB 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 ITUB is likely the superior value option right now.
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ITUB or HDB: Which Is the Better Value Stock Right Now?
Investors with an interest in Banks - Foreign stocks have likely encountered both Banco Itau (ITUB - Free Report) and HDFC Bank (HDB - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? 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.
Banco Itau has a Zacks Rank of #2 (Buy), while HDFC Bank has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that ITUB likely has seen a stronger improvement to its earnings outlook than HDB has recently. 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.
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.
ITUB currently has a forward P/E ratio of 8.12, while HDB has a forward P/E of 20.29. We also note that ITUB has a PEG ratio of 0.71. 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. HDB currently has a PEG ratio of 1.40.
Another notable valuation metric for ITUB is its P/B ratio of 1.52. 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, HDB has a P/B of 2.01.
Based on these metrics and many more, ITUB holds a Value grade of B, while HDB has a Value grade of D.
ITUB 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 ITUB is likely the superior value option right now.