Investors with an interest in Banks - Foreign stocks have likely encountered both Santander Mexico (BSMX Quick QuoteBSMX - Free Report) and HDFC Bank (HDB Quick QuoteHDB - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Santander Mexico has a Zacks Rank of #2 (Buy), while HDFC Bank has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that BSMX has an improving earnings outlook. But this is just one piece of the puzzle 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.

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.

BSMX currently has a forward P/E ratio of 7.26, while HDB has a forward P/E of 18.60. We also note that BSMX has a PEG ratio of 0.72. 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. HDB currently has a PEG ratio of 0.83.

Another notable valuation metric for BSMX is its P/B ratio of 0.92. 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, HDB has a P/B of 3.23.

Based on these metrics and many more, BSMX holds a Value grade of B, while HDB has a Value grade of C.

BSMX stands above HDB thanks to its solid earnings outlook, and based on these valuation figures, we also feel that BSMX is the superior value option right now.