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UBS Group AG (UBS) - free report >>
Grupo Financiero Santander Mexico S.A. B. de C.V. (BSMX) - free report >>
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UBS Group AG (UBS) - free report >>
Grupo Financiero Santander Mexico S.A. B. de C.V. (BSMX) - free report >>
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UBS vs. BSMX: Which Stock Is the Better Value Option?
Investors interested in stocks from the Banks - Foreign sector have probably already heard of UBS (UBS - Free Report) and Santander Mexico (BSMX - 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
UBS and Santander Mexico are sporting Zacks Ranks of #1 (Strong Buy) and #4 (Sell), respectively, right now. This means that UBS'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 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.
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.
UBS currently has a forward P/E ratio of 9.31, while BSMX has a forward P/E of 9.36. We also note that UBS has a PEG ratio of 0.91. 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. BSMX currently has a PEG ratio of 1.20.
Another notable valuation metric for UBS is its P/B ratio of 1.06. 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, BSMX has a P/B of 1.07.
Based on these metrics and many more, UBS holds a Value grade of B, while BSMX has a Value grade of C.
UBS stands above BSMX thanks to its solid earnings outlook, and based on these valuation figures, we also feel that UBS is the superior value option right now.