Back to top

Image: Bigstock

BAP or IBN: Which Is the Better Value Stock Right Now?

Read MoreHide Full Article

Investors looking for stocks in the Banks - Foreign sector might want to consider either Credicorp (BAP - Free Report) or ICICI Bank Limited (IBN - 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Credicorp and ICICI Bank Limited are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that BAP has an improving earnings outlook. But this is just one factor that value investors are interested in.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether 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.

BAP currently has a forward P/E ratio of 10.03, while IBN has a forward P/E of 21.53. We also note that BAP has a PEG ratio of 0.46. 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. IBN currently has a PEG ratio of 0.99.

Another notable valuation metric for BAP is its P/B ratio of 1.79. 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, IBN has a P/B of 3.17.

Based on these metrics and many more, BAP holds a Value grade of A, while IBN has a Value grade of C.

BAP has seen stronger estimate revision activity and sports more attractive valuation metrics than IBN, so it seems like value investors will conclude that BAP is the superior option right now.

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

ICICI Bank Limited (IBN) - free report >>

Credicorp Ltd. (BAP) - free report >>

Published in