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BMO vs. BCH: 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 Bank of Montreal (BMO - Free Report) or Banco De Chile (BCH - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Bank of Montreal and Banco De Chile are both sporting a Zacks Rank of # 2 (Buy) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. But this is just one piece of the puzzle 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.

BMO currently has a forward P/E ratio of 10.98, while BCH has a forward P/E of 12.77. We also note that BMO has a PEG ratio of 0.73. 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. BCH currently has a PEG ratio of 2.28.

Another notable valuation metric for BMO is its P/B ratio of 1.74. 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, BCH has a P/B of 1.97.

These metrics, and several others, help BMO earn a Value grade of B, while BCH has been given a Value grade of F.

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


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Bank Of Montreal (BMO) - free report >>

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