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TD vs. RY: Which Stock Should Value Investors Buy Now?
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Investors looking for stocks in the Banks - Foreign sector might want to consider either Toronto-Dominion Bank (TD - Free Report) or Royal Bank (RY - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Toronto-Dominion Bank and Royal Bank are both sporting 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 only part of the picture for value investors.
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 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.
TD currently has a forward P/E ratio of 12.51, while RY has a forward P/E of 12.60. We also note that TD has a PEG ratio of 1.52. 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 1.71.
Another notable valuation metric for TD is its P/B ratio of 1.58. 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, RY has a P/B of 1.97.
These metrics, and several others, help TD earn a Value grade of B, while RY has been given a Value grade of C.
Both TD and RY are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that TD is the superior value option right now.
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TD vs. RY: Which Stock Should Value Investors Buy Now?
Investors looking for stocks in the Banks - Foreign sector might want to consider either Toronto-Dominion Bank (TD - Free Report) or Royal Bank (RY - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Toronto-Dominion Bank and Royal Bank are both sporting 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 only part of the picture for value investors.
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 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.
TD currently has a forward P/E ratio of 12.51, while RY has a forward P/E of 12.60. We also note that TD has a PEG ratio of 1.52. 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 1.71.
Another notable valuation metric for TD is its P/B ratio of 1.58. 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, RY has a P/B of 1.97.
These metrics, and several others, help TD earn a Value grade of B, while RY has been given a Value grade of C.
Both TD and RY are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that TD is the superior value option right now.