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ITUB vs. HDB: 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 Banco Itau (ITUB - Free Report) or HDFC Bank (HDB - 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.
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 is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Right now, Banco Itau is sporting a Zacks Rank of #2 (Buy), while HDFC Bank has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that ITUB likely has seen a stronger improvement to its earnings outlook than HDB has recently. However, value investors will care about much more than just this.
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.
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.
ITUB currently has a forward P/E ratio of 8.92, while HDB has a forward P/E of 23.24. We also note that ITUB has a PEG ratio of 0.78. 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. HDB currently has a PEG ratio of 1.60.
Another notable valuation metric for ITUB is its P/B ratio of 1.67. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, HDB has a P/B of 2.30.
Based on these metrics and many more, ITUB holds a Value grade of B, while HDB has a Value grade of D.
ITUB stands above HDB thanks to its solid earnings outlook, and based on these valuation figures, we also feel that ITUB is the superior value option right now.
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ITUB vs. HDB: Which Stock Is the Better Value Option?
Investors looking for stocks in the Banks - Foreign sector might want to consider either Banco Itau (ITUB - Free Report) or HDFC Bank (HDB - 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.
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 is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Right now, Banco Itau is sporting a Zacks Rank of #2 (Buy), while HDFC Bank has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that ITUB likely has seen a stronger improvement to its earnings outlook than HDB has recently. However, value investors will care about much more than just this.
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.
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.
ITUB currently has a forward P/E ratio of 8.92, while HDB has a forward P/E of 23.24. We also note that ITUB has a PEG ratio of 0.78. 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. HDB currently has a PEG ratio of 1.60.
Another notable valuation metric for ITUB is its P/B ratio of 1.67. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, HDB has a P/B of 2.30.
Based on these metrics and many more, ITUB holds a Value grade of B, while HDB has a Value grade of D.
ITUB stands above HDB thanks to its solid earnings outlook, and based on these valuation figures, we also feel that ITUB is the superior value option right now.