BAP or BCH: Which Is the Better Value Stock Right Now?
Investors interested in Banks - Foreign stocks are likely familiar with Credicorp (BAP) and Banco De Chile (BCH). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Credicorp and Banco De Chile are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that BAP'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 analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
BAP currently has a forward P/E ratio of 8.45, while BCH has a forward P/E of 8.66. We also note that BAP has a PEG ratio of 0.47. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. BCH currently has a PEG ratio of 1.30.
Another notable valuation metric for BAP is its P/B ratio of 1.46. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, BCH has a P/B of 1.90.
Based on these metrics and many more, BAP holds a Value grade of A, while BCH has a Value grade of C.
BAP has seen stronger estimate revision activity and sports more attractive valuation metrics than BCH, so it seems like value investors will conclude that BAP is the superior option right now.
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Credicorp Ltd. (BAP) : Free Stock Analysis Report
Banco De Chile (BCH) : Free Stock Analysis Report
