BBVA or UOVEY: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Banks - Foreign sector have probably already heard of Banco Bilbao (BBVA) and United Overseas Bank Ltd. (UOVEY). 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.
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 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.
Banco Bilbao and United Overseas Bank Ltd. are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, 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 only part of the picture for value investors.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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 6.94, while UOVEY has a forward P/E of 8.41. We also note that BBVA has a PEG ratio of 0.62. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. UOVEY currently has a PEG ratio of 1.87.
Another notable valuation metric for BBVA is its P/B ratio of 1.02. 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, UOVEY has a P/B of 1.03.
Based on these metrics and many more, BBVA holds a Value grade of B, while UOVEY has 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
