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Investors with an interest in Banks - Foreign stocks have likely encountered both Canadian Imperial Bank (CM) and Banco Santander-Chile (BSAC). But which of these two companies is the best option for those looking for undervalued stocks? 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, both Canadian Imperial Bank and Banco Santander-Chile are sporting a Zacks Rank of # 2 (Buy). 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 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.
CM currently has a forward P/E ratio of 11.10, while BSAC has a forward P/E of 14.33. We also note that CM has a PEG ratio of 1.99. 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 2.49.
Another notable valuation metric for CM is its P/B ratio of 1.41. 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, BSAC has a P/B of 2.15.
These metrics, and several others, help CM earn a Value grade of B, while BSAC has been given a Value grade of D.
Both CM and BSAC are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that CM is the superior value option right now.
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Canadian Imperial Bank of Commerce (CM) : Free Stock Analysis Report
Banco Santander Chile (BSAC) : Free Stock Analysis Report
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