Back to top

Image: Bigstock

BSAC or TD: Which Is the Better Value Stock Right Now?

Read MoreHide Full Article

Investors interested in Banks - Foreign stocks are likely familiar with Banco Santander-Chile (BSAC - Free Report) and Toronto-Dominion Bank (TD - 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.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. 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, Banco Santander-Chile is sporting a Zacks Rank of #2 (Buy), while Toronto-Dominion Bank has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that BSAC likely has seen a stronger improvement to its earnings outlook than TD has recently. But this is only part of the picture for value investors.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

BSAC currently has a forward P/E ratio of 9.86, while TD has a forward P/E of 10.01. We also note that BSAC has a PEG ratio of 0.37. 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. TD currently has a PEG ratio of 1.81.

Another notable valuation metric for BSAC is its P/B ratio of 1.33. 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, TD has a P/B of 1.38.

These metrics, and several others, help BSAC earn a Value grade of B, while TD has been given a Value grade of F.

BSAC sticks out from TD in both our Zacks Rank and Style Scores models, so value investors will likely feel that BSAC is the better option right now.

See More Zacks Research for These Tickers

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

Toronto Dominion Bank (The) (TD) - free report >>

Banco Santander Chile (BSAC) - free report >>

Published in