BSAC vs. IBN: Which Stock Should Value Investors Buy Now?

IBN BSAC

Investors interested in stocks from the Banks - Foreign sector have probably already heard of Banco Santander-Chile (BSAC - Free Report) and ICICI Bank Limited (IBN - 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.

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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Right now, Banco Santander-Chile is sporting a Zacks Rank of #2 (Buy), while ICICI Bank Limited has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that BSAC likely has seen a stronger improvement to its earnings outlook than IBN has recently. But this is only part of the picture for value investors.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies 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.

BSAC currently has a forward P/E ratio of 9.96, while IBN has a forward P/E of 17.83. We also note that BSAC has a PEG ratio of 0.37. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. IBN currently has a PEG ratio of 2.28.

Another notable valuation metric for BSAC is its P/B ratio of 1.35. 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, IBN has a P/B of 2.88.

Based on these metrics and many more, BSAC holds a Value grade of B, while IBN has a Value grade of C.

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

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