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UBS vs. IBN: Which Stock Is the Better Value Option?

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Investors with an interest in Banks - Foreign stocks have likely encountered both UBS (UBS - Free Report) and ICICI Bank Limited (IBN - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

UBS has a Zacks Rank of #1 (Strong Buy), while ICICI Bank Limited has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that UBS likely has seen a stronger improvement to its earnings outlook than IBN has recently. But this is only part of the picture 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 9.66, while IBN has a forward P/E of 18.84. We also note that UBS has a PEG ratio of 0.85. 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 0.90.

Another notable valuation metric for UBS is its P/B ratio of 1.27. 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 2.78.

These are just a few of the metrics contributing to UBS's Value grade of B and IBN's Value grade of F.

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


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