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MFG vs. RY: Which Stock Is the Better Value Option?
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Investors looking for stocks in the Banks - Foreign sector might want to consider either Mizuho (MFG - Free Report) or Royal Bank (RY - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Mizuho has a Zacks Rank of #2 (Buy), while Royal Bank has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that MFG is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.
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.
MFG currently has a forward P/E ratio of 9.42, while RY has a forward P/E of 11.46. We also note that MFG has a PEG ratio of 1.42. 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. RY currently has a PEG ratio of 1.74.
Another notable valuation metric for MFG is its P/B ratio of 0.64. 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, RY has a P/B of 1.85.
These metrics, and several others, help MFG earn a Value grade of B, while RY has been given a Value grade of C.
MFG stands above RY thanks to its solid earnings outlook, and based on these valuation figures, we also feel that MFG is the superior value option right now.
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MFG vs. RY: Which Stock Is the Better Value Option?
Investors looking for stocks in the Banks - Foreign sector might want to consider either Mizuho (MFG - Free Report) or Royal Bank (RY - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Mizuho has a Zacks Rank of #2 (Buy), while Royal Bank has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that MFG is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.
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.
MFG currently has a forward P/E ratio of 9.42, while RY has a forward P/E of 11.46. We also note that MFG has a PEG ratio of 1.42. 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. RY currently has a PEG ratio of 1.74.
Another notable valuation metric for MFG is its P/B ratio of 0.64. 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, RY has a P/B of 1.85.
These metrics, and several others, help MFG earn a Value grade of B, while RY has been given a Value grade of C.
MFG stands above RY thanks to its solid earnings outlook, and based on these valuation figures, we also feel that MFG is the superior value option right now.