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Is Banco Santander (SAN) Stock Undervalued Right Now?

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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One stock to keep an eye on is Banco Santander (SAN - Free Report) . SAN is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 9.86 right now. For comparison, its industry sports an average P/E of 10.80. Over the last 12 months, SAN's Forward P/E has been as high as 9.98 and as low as 4.97, with a median of 7.28.

Investors should also recognize that SAN has a P/B ratio of 1.23. 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. This stock's P/B looks attractive against its industry's average P/B of 2.53. Over the past year, SAN's P/B has been as high as 1.23 and as low as 0.61, with a median of 0.88.

Finally, investors will want to recognize that SAN has a P/CF ratio of 8.79. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. SAN's current P/CF looks attractive when compared to its industry's average P/CF of 20.36. Within the past 12 months, SAN's P/CF has been as high as 8.79 and as low as 4.27, with a median of 5.05.

Value investors will likely look at more than just these metrics, but the above data helps show that Banco Santander is likely undervalued currently. And when considering the strength of its earnings outlook, SAN sticks out as one of the market's strongest value stocks.

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