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BSBR vs. BSAC: Which Stock Is the Better Value Option?

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Investors with an interest in Banks - Foreign stocks have likely encountered both Banco Santander-Brazil (BSBR - Free Report) and Banco Santander-Chile (BSAC - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, Banco Santander-Brazil has a Zacks Rank of #2 (Buy), while Banco Santander-Chile has a Zacks Rank of #4 (Sell). Investors should feel comfortable knowing that BSBR likely has seen a stronger improvement to its earnings outlook than BSAC has recently. But this is just one piece of the puzzle 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.

BSBR currently has a forward P/E ratio of 10.39, while BSAC has a forward P/E of 13.84. We also note that BSBR has a PEG ratio of 1. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. BSAC currently has a PEG ratio of 1.16.

Another notable valuation metric for BSBR is its P/B ratio of 1.57. 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, BSAC has a P/B of 2.53.

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

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


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Banco Santander Brasil SA (BSBR) - free report >>

Banco Santander Chile (BSAC) - free report >>

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