Back to top

Image: Bigstock

BDORY or IBN: Which Is the Better Value Stock Right Now?

Read MoreHide Full Article

Investors looking for stocks in the Banks - Foreign sector might want to consider either Banco Do Brasil SA (BDORY - Free Report) or ICICI Bank Limited (IBN - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.

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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Both Banco Do Brasil SA and ICICI Bank Limited have a Zacks Rank of # 2 (Buy) right now. 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 only part of the picture for value investors.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether 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.

BDORY currently has a forward P/E ratio of 3.91, while IBN has a forward P/E of 17.96. We also note that BDORY has a PEG ratio of 0.48. 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 1.65.

Another notable valuation metric for BDORY is its P/B ratio of 0.86. 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 2.85.

Based on these metrics and many more, BDORY holds a Value grade of A, while IBN has a Value grade of D.

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


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


ICICI Bank Limited (IBN) - free report >>

Banco Do Brasil SA (BDORY) - free report >>

Published in