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BSBR or BSAC: Which Is the Better Value Stock Right Now?

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Investors interested in stocks from the Banks - Foreign sector have probably already heard of Banco Santander-Brazil (BSBR - Free Report) and Banco Santander-Chile (BSAC - 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.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great 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.

Banco Santander-Brazil has a Zacks Rank of #1 (Strong Buy), while Banco Santander-Chile has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that BSBR likely has seen a stronger improvement to its earnings outlook than BSAC has recently. 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 Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

BSBR currently has a forward P/E ratio of 12.10, while BSAC has a forward P/E of 14.61. We also note that BSBR has a PEG ratio of 0.84. 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. BSAC currently has a PEG ratio of 1.13.

Another notable valuation metric for BSBR is its P/B ratio of 1.85. 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, BSAC has a P/B of 3.09.

These metrics, and several others, help BSBR earn a Value grade of A, while BSAC has been given a Value grade of D.

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


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Banco Santander Brasil SA (BSBR) - free report >>

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