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BNPQY vs. BNS: 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 BNP Paribas SA (BNPQY - Free Report) or Bank of Nova Scotia (BNS - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? 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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Right now, BNP Paribas SA is sporting a Zacks Rank of #2 (Buy), while Bank of Nova Scotia has a Zacks Rank of #4 (Sell). Investors should feel comfortable knowing that BNPQY likely has seen a stronger improvement to its earnings outlook than BNS has recently. But this is just one factor that value investors are interested in.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

BNPQY currently has a forward P/E ratio of 8.67, while BNS has a forward P/E of 10.33. We also note that BNPQY has a PEG ratio of 0.64. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. BNS currently has a PEG ratio of 0.73.

Another notable valuation metric for BNPQY is its P/B ratio of 0.56. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, BNS has a P/B of 1.39.

These metrics, and several others, help BNPQY earn a Value grade of A, while BNS has been given a Value grade of C.

BNPQY 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 BNPQY is likely the superior value option right now.


In-Depth Zacks Research for the Tickers Above


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BNP Paribas SA (BNPQY) - free report >>

Bank of Nova Scotia The (BNS) - free report >>

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