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

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Investors interested in Banks - Foreign stocks are likely familiar with UBS (UBS - Free Report) and Canadian Imperial Bank (CM - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Right now, UBS is sporting a Zacks Rank of #2 (Buy), while Canadian Imperial Bank has a Zacks Rank of #3 (Hold). This means that UBS's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when 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 9.57, while CM has a forward P/E of 9.80. We also note that UBS has a PEG ratio of 0.82. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. CM currently has a PEG ratio of 2.55.

Another notable valuation metric for UBS is its P/B ratio of 1.03. 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, CM has a P/B of 1.47.

Based on these metrics and many more, UBS holds a Value grade of A, while CM has a Value grade of D.

UBS sticks out from CM in both our Zacks Rank and Style Scores models, so value investors will likely feel that UBS is the better option right now.


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