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BMO or RY: Which Is the Better Value Stock Right Now?
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Investors interested in stocks from the Banks - Foreign sector have probably already heard of Bank of Montreal (BMO - Free Report) and Royal Bank (RY - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 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.
Both Bank of Montreal and Royal Bank have a Zacks Rank of # 2 (Buy) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. However, value investors will care about much more than just this.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.
BMO currently has a forward P/E ratio of 11.45, while RY has a forward P/E of 12.20. We also note that BMO has a PEG ratio of 0.73. 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 1.12.
Another notable valuation metric for BMO is its P/B ratio of 1.72. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, RY has a P/B of 2.09.
These are just a few of the metrics contributing to BMO's Value grade of B and RY's Value grade of C.
Both BMO and RY are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that BMO is the superior value option right now.
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BMO or RY: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Banks - Foreign sector have probably already heard of Bank of Montreal (BMO - Free Report) and Royal Bank (RY - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 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.
Both Bank of Montreal and Royal Bank have a Zacks Rank of # 2 (Buy) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. However, value investors will care about much more than just this.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.
BMO currently has a forward P/E ratio of 11.45, while RY has a forward P/E of 12.20. We also note that BMO has a PEG ratio of 0.73. 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 1.12.
Another notable valuation metric for BMO is its P/B ratio of 1.72. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, RY has a P/B of 2.09.
These are just a few of the metrics contributing to BMO's Value grade of B and RY's Value grade of C.
Both BMO and RY are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that BMO is the superior value option right now.