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Banco Bilbao Viscaya Argentaria S.A. (BBVA) - free report >>
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Banco Bilbao Viscaya Argentaria S.A. (BBVA) - free report >>
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BBVA or BNS: Which Is the Better Value Stock Right Now?
Investors with an interest in Banks - Foreign stocks have likely encountered both Banco Bilbao (BBVA - Free Report) and Bank of Nova Scotia (BNS - 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, Banco Bilbao is sporting a Zacks Rank of #1 (Strong Buy), while Bank of Nova Scotia has a Zacks Rank of #4 (Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that BBVA is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.
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 grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
BBVA currently has a forward P/E ratio of 5.37, while BNS has a forward P/E of 9.26. We also note that BBVA has a PEG ratio of 0.48. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. BNS currently has a PEG ratio of 2.28.
Another notable valuation metric for BBVA is its P/B ratio of 0.79. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, BNS has a P/B of 1.10.
Based on these metrics and many more, BBVA holds a Value grade of B, while BNS has a Value grade of C.
BBVA sticks out from BNS in both our Zacks Rank and Style Scores models, so value investors will likely feel that BBVA is the better option right now.