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SVNLY vs. TD: Which Stock Is the Better Value Option?
Investors interested in Banks - Foreign stocks are likely familiar with Svenska Handelsbanken Ab Publ (SVNLY - Free Report) and Toronto-Dominion Bank (TD - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Svenska Handelsbanken Ab Publ and Toronto-Dominion Bank are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that SVNLY's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle 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.
SVNLY currently has a forward P/E ratio of 8.27, while TD has a forward P/E of 9.74. We also note that SVNLY has a PEG ratio of 1.42. 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 1.66.
Another notable valuation metric for SVNLY is its P/B ratio of 1.14. 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 1.35.
Based on these metrics and many more, SVNLY holds a Value grade of A, while TD has a Value grade of D.
SVNLY stands above TD thanks to its solid earnings outlook, and based on these valuation figures, we also feel that SVNLY is the superior value option right now.