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BSBR vs. BSAC: Which Stock Is the Better Value Option?

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Investors interested in Banks - Foreign stocks are likely familiar with Banco Santander-Brazil (BSBR) and Banco Santander-Chile (BSAC - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 #2 (Buy), while Banco Santander-Chile 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 BSBR has an improving earnings outlook. But this is just one piece of the puzzle for value investors.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.

BSBR currently has a forward P/E ratio of 12.29, while BSAC has a forward P/E of 15.62. We also note that BSBR has a PEG ratio of 1.19. 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 1.31.

Another notable valuation metric for BSBR is its P/B ratio of 1.80. 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, BSAC has a P/B of 2.75.

Based on these metrics and many more, BSBR holds a Value grade of A, while BSAC has a Value grade of F.

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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