BBVA or UOVEY: Which Is the Better Value Stock Right Now?
Investors with an interest in Banks - Foreign stocks have likely encountered both Banco Bilbao (BBVA) and United Overseas Bank Ltd. (UOVEY). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Banco Bilbao has a Zacks Rank of #2 (Buy), while United Overseas Bank Ltd. has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that BBVA has an improving earnings outlook. 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.
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.
BBVA currently has a forward P/E ratio of 6.75, while UOVEY has a forward P/E of 8.73. We also note that BBVA has a PEG ratio of 0.47. 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. UOVEY currently has a PEG ratio of 1.94.
Another notable valuation metric for BBVA is its P/B ratio of 0.93. 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, UOVEY has a P/B of 1.06.
These metrics, and several others, help BBVA earn a Value grade of A, while UOVEY has been given a Value grade of C.
BBVA is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that BBVA is likely the superior value option right now.
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Banco Bilbao Viscaya Argentaria S.A. (BBVA) : Free Stock Analysis Report
United Overseas Bank Ltd. (UOVEY) : Free Stock Analysis Report
