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DB or CM: Which Is the Better Value Stock Right Now?

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Investors interested in Banks - Foreign stocks are likely familiar with Deutsche Bank (DB - Free Report) and Canadian Imperial Bank (CM - 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.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. 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 Deutsche Bank and Canadian Imperial 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. But this is only part of the picture for value investors.

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 Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

DB currently has a forward P/E ratio of 8.20, while CM has a forward P/E of 10.50. We also note that DB has a PEG ratio of 0.18. 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. CM currently has a PEG ratio of 0.95.

Another notable valuation metric for DB is its P/B ratio of 0.34. 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, CM has a P/B of 1.61.

These are just a few of the metrics contributing to DB's Value grade of B and CM's Value grade of D.

Both DB and CM are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that DB is the superior value option right now.


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Deutsche Bank Aktiengesellschaft (DB) - free report >>

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