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DNBBY or CMWAY: Which Is the Better Value Stock Right Now?

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Investors with an interest in Banks - Foreign stocks have likely encountered both DNB Bank ASA (DNBBY - Free Report) and Commonwealth Bank of Australia Sponsored ADR (CMWAY - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, DNB Bank ASA has a Zacks Rank of #1 (Strong Buy), while Commonwealth Bank of Australia Sponsored ADR has a Zacks Rank of #2 (Buy). This means that DNBBY's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. 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 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.

DNBBY currently has a forward P/E ratio of 9.79, while CMWAY has a forward P/E of 29.26. We also note that DNBBY has a PEG ratio of 7.65. 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. CMWAY currently has a PEG ratio of 9.50.

Another notable valuation metric for DNBBY is its P/B ratio of 1.64. 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, CMWAY has a P/B of 3.96.

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

DNBBY has seen stronger estimate revision activity and sports more attractive valuation metrics than CMWAY, so it seems like value investors will conclude that DNBBY is the superior option right now.

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