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BSBR vs. BCH: Which Stock Should Value Investors Buy Now?

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Investors interested in Banks - Foreign stocks are likely familiar with Banco Santander-Brazil (BSBR - Free Report) and Banco De Chile (BCH - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

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.

Both Banco Santander-Brazil and Banco De Chile have a Zacks Rank of # 2 (Buy) right now. 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 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.

BSBR currently has a forward P/E ratio of 10.59, while BCH has a forward P/E of 14.33. We also note that BSBR has a PEG ratio of 1.89. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. BCH currently has a PEG ratio of 2.75.

Another notable valuation metric for BSBR is its P/B ratio of 1.44. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, BCH has a P/B of 2.27.

Based on these metrics and many more, BSBR holds a Value grade of A, while BCH has a Value grade of C.

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


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Banco De Chile (BCH) - free report >>

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