Is Banco Santander (SAN) Stock Undervalued Right Now?
The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company to watch right now is Banco Santander (SAN). SAN is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 5.09 right now. For comparison, its industry sports an average P/E of 8.03. Over the past year, SAN's Forward P/E has been as high as 7 and as low as 4.44, with a median of 5.46.
SAN is also sporting a PEG ratio of 0.33. 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. SAN's industry currently sports an average PEG of 0.74. Over the past 52 weeks, SAN's PEG has been as high as 0.38 and as low as 0.28, with a median of 0.33.
Another valuation metric that we should highlight is SAN's P/B ratio of 0.57. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 1.51. SAN's P/B has been as high as 0.66 and as low as 0.49, with a median of 0.56, over the past year.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. SAN has a P/S ratio of 1.02. This compares to its industry's average P/S of 1.16.
Finally, we should also recognize that SAN has a P/CF ratio of 4.42. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 11.99. Within the past 12 months, SAN's P/CF has been as high as 5.31 and as low as 4.07, with a median of 4.59.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Banco Santander is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, SAN feels like a great value stock at the moment.
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Banco Santander, S.A. (SAN) : Free Stock Analysis Report
