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BCS or EBKDY: Which Is the Better Value Stock Right Now?

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Investors interested in Banks - Foreign stocks are likely familiar with Barclays (BCS - Free Report) and Erste Group Bank AG (EBKDY - 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 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.

Barclays and Erste Group Bank AG are sporting Zacks Ranks of #1 (Strong Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that BCS has an improving earnings outlook. However, value investors will care about much more than just this.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies 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.

BCS currently has a forward P/E ratio of 6.04, while EBKDY has a forward P/E of 7.50. We also note that BCS has a PEG ratio of 0.33. 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. EBKDY currently has a PEG ratio of 0.95.

Another notable valuation metric for BCS is its P/B ratio of 0.54. 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, EBKDY has a P/B of 0.84.

Based on these metrics and many more, BCS holds a Value grade of B, while EBKDY has a Value grade of C.

BCS stands above EBKDY thanks to its solid earnings outlook, and based on these valuation figures, we also feel that BCS is the superior value option right now.


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