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BBVA vs. TD: Which Stock Is the Better Value Option?

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Investors looking for stocks in the Banks - Foreign sector might want to consider either Banco Bilbao (BBVA - Free Report) or Toronto-Dominion Bank (TD - 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.

Both Banco Bilbao and Toronto-Dominion Bank have a Zacks Rank of #2 (Buy) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is only part of the picture for value investors.

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.

BBVA currently has a forward P/E ratio of 12.05, while TD has a forward P/E of 17.19. We also note that BBVA has a PEG ratio of 0.77. 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. TD currently has a PEG ratio of 1.20.

Another notable valuation metric for BBVA is its P/B ratio of 2.19. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, TD has a P/B of 2.43.

These are just a few of the metrics contributing to BBVA's Value grade of A and TD's Value grade of F.

Both BBVA and TD are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that BBVA is the superior value option right now.

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