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UBS or BAP: Which Is the Better Value Stock Right Now?

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Investors looking for stocks in the Banks - Foreign sector might want to consider either UBS (UBS - Free Report) or Credicorp (BAP - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. 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.

UBS has a Zacks Rank of #1 (Strong Buy), while Credicorp has a Zacks Rank of #5 (Strong Sell) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that UBS is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.

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.

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.

UBS currently has a forward P/E ratio of 10.65, while BAP has a forward P/E of 13.61. We also note that UBS has a PEG ratio of 1.92. 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. BAP currently has a PEG ratio of 3.17.

Another notable valuation metric for UBS is its P/B ratio of 0.79. 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, BAP has a P/B of 1.43.

These metrics, and several others, help UBS earn a Value grade of A, while BAP has been given a Value grade of D.

UBS stands above BAP thanks to its solid earnings outlook, and based on these valuation figures, we also feel that UBS is the superior value option right now.


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