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HSBC vs. TD: Which Stock Is the Better Value Option?
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Investors interested in Banks - Foreign stocks are likely familiar with HSBC (HSBC - Free Report) and Toronto-Dominion Bank (TD - 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.
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.
HSBC has a Zacks Rank of #1 (Strong Buy), while Toronto-Dominion Bank has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that HSBC 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 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.
HSBC currently has a forward P/E ratio of 9.15, while TD has a forward P/E of 12.74. We also note that HSBC 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 1.61.
Another notable valuation metric for HSBC is its P/B ratio of 1.12. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, TD has a P/B of 1.56.
Based on these metrics and many more, HSBC holds a Value grade of B, while TD has a Value grade of C.
HSBC has seen stronger estimate revision activity and sports more attractive valuation metrics than TD, so it seems like value investors will conclude that HSBC is the superior option right now.
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HSBC vs. TD: Which Stock Is the Better Value Option?
Investors interested in Banks - Foreign stocks are likely familiar with HSBC (HSBC - Free Report) and Toronto-Dominion Bank (TD - 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.
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.
HSBC has a Zacks Rank of #1 (Strong Buy), while Toronto-Dominion Bank has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that HSBC 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 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.
HSBC currently has a forward P/E ratio of 9.15, while TD has a forward P/E of 12.74. We also note that HSBC 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 1.61.
Another notable valuation metric for HSBC is its P/B ratio of 1.12. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, TD has a P/B of 1.56.
Based on these metrics and many more, HSBC holds a Value grade of B, while TD has a Value grade of C.
HSBC has seen stronger estimate revision activity and sports more attractive valuation metrics than TD, so it seems like value investors will conclude that HSBC is the superior option right now.