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UBS or TD: Which Is the Better Value Stock Right Now?

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Investors interested in Banks - Foreign stocks are likely familiar with UBS (UBS - Free Report) and 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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Right now, UBS is sporting a Zacks Rank of #1 (Strong Buy), while Toronto-Dominion Bank has a Zacks Rank of #2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that UBS has an improving earnings outlook. But this is just one factor that value investors are interested in.

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.

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.

UBS currently has a forward P/E ratio of 12.43, while TD has a forward P/E of 16.76. We also note that UBS has a PEG ratio of 0.67. 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 1.17.

Another notable valuation metric for UBS is its P/B ratio of 1.67. 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 2.37.

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

UBS sticks out from TD in both our Zacks Rank and Style Scores models, so value investors will likely feel that UBS is the better option right now.

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