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CIB vs. BSAC: Which Stock Is the Better Value Option?

Zacks Equity Research
·2 mins read

Investors interested in stocks from the Banks - Foreign sector have probably already heard of Bancolombia (CIB) and Banco Santander-Chile (BSAC). But which of these two stocks presents investors with the better value opportunity right now? Let's 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, Bancolombia has a Zacks Rank of #2 (Buy), while Banco Santander-Chile has a Zacks Rank of #4 (Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that CIB is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture 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.

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.

CIB currently has a forward P/E ratio of 12.23, while BSAC has a forward P/E of 13.77. We also note that CIB has a PEG ratio of 1.36. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. BSAC currently has a PEG ratio of 1.86.

Another notable valuation metric for CIB is its P/B ratio of 0.75. 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, BSAC has a P/B of 1.98.

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

CIB sticks out from BSAC in both our Zacks Rank and Style Scores models, so value investors will likely feel that CIB is the better option right now.


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BanColombia S.A. (CIB) : Free Stock Analysis Report
 
Banco Santander Chile (BSAC) : Free Stock Analysis Report
 
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Zacks Investment Research