BCS or SVNLY: 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 Svenska Handelsbanken Ab Publ (SVNLY). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Barclays and Svenska Handelsbanken Ab Publ are both sporting a Zacks Rank of # 2 (Buy) right now. This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings 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.
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.
BCS currently has a forward P/E ratio of 5.78, while SVNLY has a forward P/E of 8.97. We also note that BCS has a PEG ratio of 0.38. 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. SVNLY currently has a PEG ratio of 1.54.
Another notable valuation metric for BCS is its P/B ratio of 0.40. 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, SVNLY has a P/B of 1.10.
These are just a few of the metrics contributing to BCS's Value grade of A and SVNLY's Value grade of F.
Both BCS and SVNLY 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
Svenska Handelsbanken Ab Publ (SVNLY) : Free Stock Analysis Report
