Back to top

Image: Bigstock

EBKDY or CM: Which Is the Better Value Stock Right Now?

Read MoreHide Full Article

Investors interested in stocks from the Banks - Foreign sector have probably already heard of Erste Group Bank AG (EBKDY - Free Report) and Canadian Imperial Bank (CM - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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 is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Erste Group Bank AG has a Zacks Rank of #2 (Buy), while Canadian Imperial Bank has a Zacks Rank of #3 (Hold) right now. This means that EBKDY's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks 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.

EBKDY currently has a forward P/E ratio of 6.09, while CM has a forward P/E of 9.43. We also note that EBKDY has a PEG ratio of 1.02. 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 2.23.

Another notable valuation metric for EBKDY is its P/B ratio of 0.74. 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, CM has a P/B of 1.21.

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

EBKDY sticks out from CM in both our Zacks Rank and Style Scores models, so value investors will likely feel that EBKDY is the better option right now.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Canadian Imperial Bank of Commerce (CM) - free report >>

Erste Group Bank AG (EBKDY) - free report >>

Published in