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SMFG vs. RY: Which Stock Should Value Investors Buy Now?
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Investors looking for stocks in the Banks - Foreign sector might want to consider either Sumitomo Mitsui (SMFG - Free Report) or Royal Bank (RY - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great 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.
Sumitomo Mitsui and Royal Bank are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that SMFG likely has seen a stronger improvement to its earnings outlook than RY has recently. But this is only part of the picture for value investors.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.
SMFG currently has a forward P/E ratio of 9.16, while RY has a forward P/E of 11.55. We also note that SMFG has a PEG ratio of 1.45. 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 1.75.
Another notable valuation metric for SMFG is its P/B ratio of 0.65. 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, RY has a P/B of 1.86.
Based on these metrics and many more, SMFG holds a Value grade of B, while RY has a Value grade of C.
SMFG has seen stronger estimate revision activity and sports more attractive valuation metrics than RY, so it seems like value investors will conclude that SMFG is the superior option right now.
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SMFG vs. RY: Which Stock Should Value Investors Buy Now?
Investors looking for stocks in the Banks - Foreign sector might want to consider either Sumitomo Mitsui (SMFG - Free Report) or Royal Bank (RY - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great 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.
Sumitomo Mitsui and Royal Bank are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that SMFG likely has seen a stronger improvement to its earnings outlook than RY has recently. But this is only part of the picture for value investors.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.
SMFG currently has a forward P/E ratio of 9.16, while RY has a forward P/E of 11.55. We also note that SMFG has a PEG ratio of 1.45. 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 1.75.
Another notable valuation metric for SMFG is its P/B ratio of 0.65. 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, RY has a P/B of 1.86.
Based on these metrics and many more, SMFG holds a Value grade of B, while RY has a Value grade of C.
SMFG has seen stronger estimate revision activity and sports more attractive valuation metrics than RY, so it seems like value investors will conclude that SMFG is the superior option right now.