Back to top

Image: Bigstock

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

Read MoreHide Full Article

Investors interested in Banks - Foreign stocks are likely familiar with Bank of Nova Scotia (BNS - Free Report) and Banco Santander-Chile (BSAC - 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.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Both Bank of Nova Scotia and Banco Santander-Chile have a Zacks Rank of # 2 (Buy) right now. Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. 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.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

BNS currently has a forward P/E ratio of 11.36, while BSAC has a forward P/E of 14.61. We also note that BNS has a PEG ratio of 1.08. 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. BSAC currently has a PEG ratio of 2.54.

Another notable valuation metric for BNS is its P/B ratio of 1.34. 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 1.88.

These metrics, and several others, help BNS earn a Value grade of B, while BSAC has been given a Value grade of D.

Both BNS and BSAC are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that BNS is the superior value option right now.


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Bank of Nova Scotia The (BNS) - free report >>

Banco Santander Chile (BSAC) - free report >>

Published in