KB or SMFG: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Banks - Foreign sector might want to consider either KB Financial (KB) or Sumitomo Mitsui (SMFG). 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.
KB Financial has a Zacks Rank of #2 (Buy), while Sumitomo Mitsui has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that KB likely has seen a stronger improvement to its earnings outlook than SMFG has recently. 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 Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
KB currently has a forward P/E ratio of 3.64, while SMFG has a forward P/E of 11.45. We also note that KB has a PEG ratio of 0.28. 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. SMFG currently has a PEG ratio of 1.46.
Another notable valuation metric for KB is its P/B ratio of 0.33. 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, SMFG has a P/B of 0.69.
These metrics, and several others, help KB earn a Value grade of A, while SMFG has been given a Value grade of C.
KB sticks out from SMFG in both our Zacks Rank and Style Scores models, so value investors will likely feel that KB is the better option right now.
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KB Financial Group Inc (KB) : Free Stock Analysis Report
Sumitomo Mitsui Financial Group Inc (SMFG) : Free Stock Analysis Report
