Back to top

BCS vs. BNS: Which Stock Is the Better Value Option?

Read MoreHide Full Article

Investors interested in stocks from the Banks - Foreign sector have probably already heard of Barclays (BCS - Free Report) and Bank of Nova Scotia (BNS - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Currently, Barclays has a Zacks Rank of #2 (Buy), while Bank of Nova Scotia has a Zacks Rank of #3 (Hold). This means that BCS's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture for value investors.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks 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.

BCS currently has a forward P/E ratio of 7.81, while BNS has a forward P/E of 9.64. We also note that BCS has a PEG ratio of 0.40. 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. BNS currently has a PEG ratio of 1.51.

Another notable valuation metric for BCS is its P/B ratio of 0.43. 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, BNS has a P/B of 1.36.

Based on these metrics and many more, BCS holds a Value grade of A, while BNS has a Value grade of D.

BCS is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that BCS is likely the superior value option right now.




In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Barclays PLC (BCS) - free report >>

Bank of Nova Scotia (The) (BNS) - free report >>

More from Zacks Tale of the Tape

You May Like

Published in