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TD vs. RY: Which Stock Should Value Investors Buy Now?
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Investors with an interest in Banks - Foreign stocks have likely encountered both Toronto-Dominion Bank (TD - Free Report) and Royal Bank (RY - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, both Toronto-Dominion Bank and Royal Bank are holding 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. However, value investors will care about much more than just this.
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 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.
TD currently has a forward P/E ratio of 11.52, while RY has a forward P/E of 11.73. We also note that TD has a PEG ratio of 0.99. 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 1.17.
Another notable valuation metric for TD is its P/B ratio of 1.86. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, RY has a P/B of 2.19.
Based on these metrics and many more, TD holds a Value grade of B, while RY has 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 with an interest in Banks - Foreign stocks have likely encountered both Toronto-Dominion Bank (TD - Free Report) and Royal Bank (RY - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, both Toronto-Dominion Bank and Royal Bank are holding 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. However, value investors will care about much more than just this.
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 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.
TD currently has a forward P/E ratio of 11.52, while RY has a forward P/E of 11.73. We also note that TD has a PEG ratio of 0.99. 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 1.17.
Another notable valuation metric for TD is its P/B ratio of 1.86. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, RY has a P/B of 2.19.
Based on these metrics and many more, TD holds a Value grade of B, while RY has 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.