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Banco Bilbao Viscaya Argentaria S.A. (BBVA) - free report >>
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Banco Bilbao Viscaya Argentaria S.A. (BBVA) - free report >>
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BBVA vs. OSVBF: Which Stock Should Value Investors Buy Now?
Investors interested in stocks from the Banks - Foreign sector have probably already heard of Banco Bilbao (BBVA - Free Report) and OneSavings Bank PLC . 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.
Banco Bilbao has a Zacks Rank of #2 (Buy), while OneSavings Bank PLC has a Zacks Rank of #3 (Hold) right now. This means that BBVA'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 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 Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
BBVA currently has a forward P/E ratio of 7.21, while OSVBF has a forward P/E of 7.97. We also note that BBVA has a PEG ratio of 0.87. 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. OSVBF currently has a PEG ratio of 1.14.
Another notable valuation metric for BBVA is its P/B ratio of 0.67. 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, OSVBF has a P/B of 1.80.
Based on these metrics and many more, BBVA holds a Value grade of A, while OSVBF has a Value grade of C.
BBVA has seen stronger estimate revision activity and sports more attractive valuation metrics than OSVBF, so it seems like value investors will conclude that BBVA is the superior option right now.