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KB vs. RY: Which Stock Should Value Investors Buy Now?
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Investors interested in stocks from the Banks - Foreign sector have probably already heard of KB Financial (KB - Free Report) and Royal Bank (RY - 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, both KB Financial and Royal Bank are sporting a Zacks Rank of # 2 (Buy). This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. But this is just one factor that value investors are interested in.
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.
KB currently has a forward P/E ratio of 6.53, while RY has a forward P/E of 13.15. We also note that KB has a PEG ratio of 1.32. 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. RY currently has a PEG ratio of 1.88.
Another notable valuation metric for KB is its P/B ratio of 0.46. 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, RY has a P/B of 1.84.
These are just a few of the metrics contributing to KB's Value grade of B and RY's Value grade of F.
Both KB and RY are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that KB is the superior value option right now.
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KB vs. RY: Which Stock Should Value Investors Buy Now?
Investors interested in stocks from the Banks - Foreign sector have probably already heard of KB Financial (KB - Free Report) and Royal Bank (RY - 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, both KB Financial and Royal Bank are sporting a Zacks Rank of # 2 (Buy). This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. But this is just one factor that value investors are interested in.
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.
KB currently has a forward P/E ratio of 6.53, while RY has a forward P/E of 13.15. We also note that KB has a PEG ratio of 1.32. 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. RY currently has a PEG ratio of 1.88.
Another notable valuation metric for KB is its P/B ratio of 0.46. 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, RY has a P/B of 1.84.
These are just a few of the metrics contributing to KB's Value grade of B and RY's Value grade of F.
Both KB and RY are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that KB is the superior value option right now.