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EBKDY or HDB: Which Is the Better Value Stock Right Now?

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Investors looking for stocks in the Banks - Foreign sector might want to consider either Erste Group Bank AG (EBKDY - Free Report) or HDFC Bank (HDB - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Currently, Erste Group Bank AG has a Zacks Rank of #2 (Buy), while HDFC Bank has a Zacks Rank of #4 (Sell). This means that EBKDY's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.

EBKDY currently has a forward P/E ratio of 13.31, while HDB has a forward P/E of 26.87. We also note that EBKDY has a PEG ratio of 0.61. 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. HDB currently has a PEG ratio of 1.24.

Another notable valuation metric for EBKDY is its P/B ratio of 0.61. 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, HDB has a P/B of 4.99.

These metrics, and several others, help EBKDY earn a Value grade of B, while HDB has been given a Value grade of C.

EBKDY has seen stronger estimate revision activity and sports more attractive valuation metrics than HDB, so it seems like value investors will conclude that EBKDY is the superior option right now.


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