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KBCSY vs. DBSDY: 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 KBC Group SA (KBCSY - Free Report) or DBS Group Holdings Ltd (DBSDY - 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.

Right now, KBC Group SA is sporting a Zacks Rank of #1 (Strong Buy), while DBS Group Holdings Ltd has a Zacks Rank of #4 (Sell). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that KBCSY has an improving earnings outlook. 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.

KBCSY currently has a forward P/E ratio of 7.58, while DBSDY has a forward P/E of 8.27. We also note that KBCSY has a PEG ratio of 0.65. 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. DBSDY currently has a PEG ratio of 1.26.

Another notable valuation metric for KBCSY is its P/B ratio of 1.30. 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, DBSDY has a P/B of 1.45.

These are just a few of the metrics contributing to KBCSY's Value grade of B and DBSDY's Value grade of C.

KBCSY stands above DBSDY thanks to its solid earnings outlook, and based on these valuation figures, we also feel that KBCSY is the superior value option right now.


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