Back to top

Image: Bigstock

FBP vs. DBSDY: Which Stock Is the Better Value Option?

Read MoreHide Full Article

Investors with an interest in Banks - Foreign stocks have likely encountered both First BanCorp (FBP - Free Report) and DBS Group Holdings Ltd (DBSDY - 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

First BanCorp has a Zacks Rank of #2 (Buy), while DBS Group Holdings Ltd has a Zacks Rank of #4 (Sell) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that FBP 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.

FBP currently has a forward P/E ratio of 10.74, while DBSDY has a forward P/E of 15.01. We also note that FBP has a PEG ratio of 1.45. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. DBSDY currently has a PEG ratio of 3.84.

Another notable valuation metric for FBP is its P/B ratio of 1.91. 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, DBSDY has a P/B of 2.47.

These metrics, and several others, help FBP earn a Value grade of B, while DBSDY has been given a Value grade of D.

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

Zacks' 7 Best Strong Buy Stocks (New Research Report)

Valued at $99, click below to receive our just-released report predicting the 7 stocks that will soar highest in the coming month.

Click Here, It's Really Free

Published in