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

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Investors looking for stocks in the Banks - Foreign sector might want to consider either UBS (UBS - Free Report) or KBC Group SA (KBCSY - 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.

Right now, both UBS and KBC Group SA are sporting a Zacks Rank of # 1 (Strong Buy). Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. But this is just one piece of the puzzle for value investors.

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.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

UBS currently has a forward P/E ratio of 9.96, while KBCSY has a forward P/E of 9.97. We also note that UBS has a PEG ratio of 1.46. 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. KBCSY currently has a PEG ratio of 1.64.

Another notable valuation metric for UBS is its P/B ratio of 1.31. 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, KBCSY has a P/B of 1.46.

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

Both UBS and KBCSY are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that UBS is the superior value option right now.


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