U.S. Markets close in 2 hrs 36 mins
  • S&P 500

    4,121.16
    -18.90 (-0.46%)
     
  • Dow 30

    32,809.48
    -23.06 (-0.07%)
     
  • Nasdaq

    12,466.30
    -178.16 (-1.41%)
     
  • Russell 2000

    1,907.96
    -33.24 (-1.71%)
     
  • Crude Oil

    90.15
    -0.61 (-0.67%)
     
  • Gold

    1,812.70
    +7.50 (+0.42%)
     
  • Silver

    20.49
    -0.13 (-0.63%)
     
  • EUR/USD

    1.0219
    +0.0031 (+0.3066%)
     
  • 10-Yr Bond

    2.7860
    +0.0210 (+0.76%)
     
  • Vix

    22.04
    +0.75 (+3.52%)
     
  • GBP/USD

    1.2083
    +0.0012 (+0.1027%)
     
  • USD/JPY

    135.0480
    +0.0780 (+0.0578%)
     
  • BTC-USD

    23,112.15
    -865.11 (-3.61%)
     
  • CMC Crypto 200

    536.86
    -20.49 (-3.68%)
     
  • FTSE 100

    7,488.15
    +5.78 (+0.08%)
     
  • Nikkei 225

    27,999.96
    -175.94 (-0.62%)
     

BSMX vs. HDB: Which Stock Is the Better Value Option?

  • Oops!
    Something went wrong.
    Please try again later.
·2 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

Investors with an interest in Banks - Foreign stocks have likely encountered both Santander Mexico (BSMX) and HDFC Bank (HDB). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive 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.

Santander Mexico has a Zacks Rank of #2 (Buy), while HDFC Bank has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that BSMX has an improving earnings outlook. But this is just one piece of the puzzle for value investors.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.

BSMX currently has a forward P/E ratio of 7.26, while HDB has a forward P/E of 18.60. We also note that BSMX has a PEG ratio of 0.72. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. HDB currently has a PEG ratio of 0.83.

Another notable valuation metric for BSMX is its P/B ratio of 0.92. 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, HDB has a P/B of 3.23.

Based on these metrics and many more, BSMX holds a Value grade of B, while HDB has a Value grade of C.

BSMX stands above HDB thanks to its solid earnings outlook, and based on these valuation figures, we also feel that BSMX is the superior value option right now.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Grupo Financiero Santander Mexico S.A. B. de C.V. (BSMX) : Free Stock Analysis Report
 
HDFC Bank Limited (HDB) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research