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CS vs. RY: Which Stock Is the Better Value Option?
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Investors interested in stocks from the Banks - Foreign sector have probably already heard of Credit Suisse and Royal Bank (RY - 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.
Credit Suisse has a Zacks Rank of #1 (Strong Buy), while Royal Bank has a Zacks Rank of #3 (Hold) right now. This means that CS's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst 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 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.
CS currently has a forward P/E ratio of 7.90, while RY has a forward P/E of 11.28. We also note that CS has a PEG ratio of 0.43. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. RY currently has a PEG ratio of 2.18.
Another notable valuation metric for CS is its P/B ratio of 0.68. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, RY has a P/B of 1.92.
These are just a few of the metrics contributing to CS's Value grade of A and RY's Value grade of C.
CS stands above RY thanks to its solid earnings outlook, and based on these valuation figures, we also feel that CS is the superior value option right now.
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CS vs. RY: Which Stock Is the Better Value Option?
Investors interested in stocks from the Banks - Foreign sector have probably already heard of Credit Suisse and Royal Bank (RY - 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.
Credit Suisse has a Zacks Rank of #1 (Strong Buy), while Royal Bank has a Zacks Rank of #3 (Hold) right now. This means that CS's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst 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 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.
CS currently has a forward P/E ratio of 7.90, while RY has a forward P/E of 11.28. We also note that CS has a PEG ratio of 0.43. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. RY currently has a PEG ratio of 2.18.
Another notable valuation metric for CS is its P/B ratio of 0.68. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, RY has a P/B of 1.92.
These are just a few of the metrics contributing to CS's Value grade of A and RY's Value grade of C.
CS stands above RY thanks to its solid earnings outlook, and based on these valuation figures, we also feel that CS is the superior value option right now.