BAP or HDB: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Banks - Foreign sector might want to consider either Credicorp (BAP) or HDFC Bank (HDB). 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.
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.
Credicorp has a Zacks Rank of #2 (Buy), while HDFC Bank has a Zacks Rank of #4 (Sell) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that BAP is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
BAP currently has a forward P/E ratio of 9.74, while HDB has a forward P/E of 19.23. We also note that BAP 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. HDB currently has a PEG ratio of 0.89.
Another notable valuation metric for BAP is its P/B ratio of 1.70. 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, HDB has a P/B of 3.61.
These metrics, and several others, help BAP earn a Value grade of B, while HDB has been given a Value grade of D.
BAP sticks out from HDB in both our Zacks Rank and Style Scores models, so value investors will likely feel that BAP is the better option right now.
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Credicorp Ltd. (BAP) : Free Stock Analysis Report
HDFC Bank Limited (HDB) : Free Stock Analysis Report
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