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ING or BBD: 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 ING Groep (ING - Free Report) or Banco Bradesco (BBD - 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.

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 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.

Right now, ING Groep is sporting a Zacks Rank of #2 (Buy), while Banco Bradesco has a Zacks Rank of #4 (Sell). Investors should feel comfortable knowing that ING likely has seen a stronger improvement to its earnings outlook than BBD has recently. 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.

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.

ING currently has a forward P/E ratio of 10.27, while BBD has a forward P/E of 11.50. We also note that ING has a PEG ratio of 2.20. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. BBD currently has a PEG ratio of 3.99.

Another notable valuation metric for ING is its P/B ratio of 0.54. 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, BBD has a P/B of 1.36.

These are just a few of the metrics contributing to ING's Value grade of A and BBD's Value grade of C.

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


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ING Group, N.V. (ING) - free report >>

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