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CIB or CM: Which Is the Better Value Stock Right Now?

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Investors interested in Banks - Foreign stocks are likely familiar with Bancolombia (CIB) and Canadian Imperial Bank (CM). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, Bancolombia is sporting a Zacks Rank of #1 (Strong Buy), while Canadian Imperial Bank has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that CIB likely has seen a stronger improvement to its earnings outlook than CM has recently. But this is just one factor that value investors are interested in.

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.

CIB currently has a forward P/E ratio of 6.21, while CM has a forward P/E of 8.04. We also note that CIB has a PEG ratio of 0.36. 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. CM currently has a PEG ratio of 2.06.

Another notable valuation metric for CIB is its P/B ratio of 0.94. 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, CM has a P/B of 1.29.

These are just a few of the metrics contributing to CIB's Value grade of B and CM's Value grade of D.

CIB is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that CIB is likely the superior value option right now.


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Zacks Investment Research