BCS or ING: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Banks - Foreign sector might want to consider either Barclays (BCS) or ING Groep (ING). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, both Barclays and ING Groep are sporting a Zacks Rank of # 2 (Buy). Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. But this is just one factor that value investors are interested in.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.
BCS currently has a forward P/E ratio of 7.16, while ING has a forward P/E of 7.82. We also note that BCS has a PEG ratio of 2.56. 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. ING currently has a PEG ratio of 6.69.
Another notable valuation metric for BCS is its P/B ratio of 0.48. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, ING has a P/B of 0.74.
These are just a few of the metrics contributing to BCS's Value grade of B and ING's Value grade of C.
Both BCS and ING are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that BCS is the superior value option right now.
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Barclays PLC (BCS) : Free Stock Analysis Report
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