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BSBR or HSNGY: Which Is the Better Value Stock Right Now?

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Investors interested in Banks - Foreign stocks are likely familiar with Banco Santander-Brazil (BSBR - Free Report) and Hang Seng Bank Ltd. (HSNGY - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, Banco Santander-Brazil is sporting a Zacks Rank of #2 (Buy), while Hang Seng Bank Ltd. has a Zacks Rank of #4 (Sell). Investors should feel comfortable knowing that BSBR likely has seen a stronger improvement to its earnings outlook than HSNGY has recently. But this is only part of the picture for value investors.

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.

BSBR currently has a forward P/E ratio of 9.75, while HSNGY has a forward P/E of 16.89. We also note that BSBR has a PEG ratio of 0.98. 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. HSNGY currently has a PEG ratio of 2.20.

Another notable valuation metric for BSBR is its P/B ratio of 1.41. 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, HSNGY has a P/B of 1.50.

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

BSBR is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that BSBR is likely the superior value option right now.


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