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Grupo Financiero Santander Mexico S.A. B. de C.V. (BSMX) - free report >>
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Grupo Financiero Santander Mexico S.A. B. de C.V. (BSMX) - free report >>
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BSMX or NRDBY: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Banks - Foreign sector have probably already heard of Santander Mexico (BSMX - Free Report) and Nordea Bank AB (NRDBY - 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.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. 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 and Nordea Bank AB are both sporting a Zacks Rank of # 1 (Strong 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 just one factor that value investors are interested in.
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.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
BSMX currently has a forward P/E ratio of 6.70, while NRDBY has a forward P/E of 9.28. We also note that BSMX has a PEG ratio of 0.43. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. NRDBY currently has a PEG ratio of 1.04.
Another notable valuation metric for BSMX is its P/B ratio of 1. 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, NRDBY has a P/B of 1.15.
Based on these metrics and many more, BSMX holds a Value grade of B, while NRDBY has a Value grade of F.
Both BSMX and NRDBY are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that BSMX is the superior value option right now.