BAP vs. HDB: Which Stock Is the Better Value Option?
Investors interested in Banks - Foreign stocks are likely familiar with Credicorp (BAP) and HDFC Bank (HDB). But which of these two stocks presents investors with the better value opportunity right now? 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Credicorp and HDFC Bank are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), 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 just one factor that value investors are interested in.
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 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 9.44, while HDB has a forward P/E of 20.02. We also note that BAP has a PEG ratio of 0.59. 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. HDB currently has a PEG ratio of 1.40.
Another notable valuation metric for BAP is its P/B ratio of 1.56. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, HDB has a P/B of 1.87.
These are just a few of the metrics contributing to BAP's Value grade of B and HDB's Value grade of D.
BAP has seen stronger estimate revision activity and sports more attractive valuation metrics than HDB, 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
HDFC Bank Limited (HDB) : Free Stock Analysis Report
