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UNCRY vs. SMFG: Which Stock Is the Better Value Option?

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Investors interested in stocks from the Banks - Foreign sector have probably already heard of UniCredit S.p.A. Unsponsored ADR (UNCRY - Free Report) and Sumitomo Mitsui (SMFG - 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.

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.

UniCredit S.p.A. Unsponsored ADR and Sumitomo Mitsui are sporting Zacks Ranks of #1 (Strong Buy) and #5 (Strong Sell), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that UNCRY is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks 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.

UNCRY currently has a forward P/E ratio of 5.83, while SMFG has a forward P/E of 7.07. We also note that UNCRY has a PEG ratio of 0.32. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. SMFG currently has a PEG ratio of 0.52.

Another notable valuation metric for UNCRY is its P/B ratio of 0.31. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, SMFG has a P/B of 0.40.

These metrics, and several others, help UNCRY earn a Value grade of B, while SMFG has been given a Value grade of C.

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


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Sumitomo Mitsui Financial Group Inc (SMFG) - free report >>

UniCredit S.p.A. Unsponsored ADR (UNCRY) - free report >>

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