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BCS or BSMX: Which Is the Better Value Stock Right Now?

·2 min read

Investors interested in Banks - Foreign stocks are likely familiar with Barclays (BCS) and Santander Mexico (BSMX). 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.

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 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.

Currently, Barclays has a Zacks Rank of #2 (Buy), while Santander Mexico has a Zacks Rank of #3 (Hold). This means that BCS's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.

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.

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.

BCS currently has a forward P/E ratio of 7.22, while BSMX has a forward P/E of 9.61. We also note that BCS has a PEG ratio of 2.58. 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. BSMX currently has a PEG ratio of 2.65.

Another notable valuation metric for BCS is its P/B ratio of 0.48. 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, BSMX has a P/B of 1.49.

These are just a few of the metrics contributing to BCS's Value grade of B and BSMX's Value grade of C.

BCS sticks out from BSMX in both our Zacks Rank and Style Scores models, so value investors will likely feel that BCS is the better option right now.

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