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BMA vs. BBD: Which Stock Should Value Investors Buy Now?

Zacks Equity Research
EnerSys (ENS) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.

Investors looking for stocks in the Banks - Foreign sector might want to consider either Banco Macro (BMA) or Banco Bradesco (BBD). 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Both Banco Macro and Banco Bradesco have a Zacks Rank of # 1 (Strong 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 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 Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

BMA currently has a forward P/E ratio of 4.95, while BBD has a forward P/E of 11.18. We also note that BMA has a PEG ratio of 0.36. 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. BBD currently has a PEG ratio of 0.50.

Another notable valuation metric for BMA is its P/B ratio of 1.58. 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, BBD has a P/B of 2.08.

These metrics, and several others, help BMA earn a Value grade of A, while BBD has been given a Value grade of F.

Both BMA and BBD are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that BMA is the superior value option right now.


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Macro Bank Inc. (BMA) : Free Stock Analysis Report
 
Banco Bradesco SA (BBD) : Free Stock Analysis Report
 
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