Investors with an interest in Banks - Foreign stocks have likely encountered both KB Financial (KB) and Banco Bradesco (BBD). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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.
Currently, KB Financial has a Zacks Rank of #2 (Buy), while Banco Bradesco has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that KB likely has seen a stronger improvement to its earnings outlook than BBD has recently. But this is just one piece of the puzzle for value investors.
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.
KB currently has a forward P/E ratio of 5.28, while BBD has a forward P/E of 10.54. We also note that KB has a PEG ratio of 1.07. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. BBD currently has a PEG ratio of 3.66.
Another notable valuation metric for KB is its P/B ratio of 0.38. 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, BBD has a P/B of 1.25.
These are just a few of the metrics contributing to KB's Value grade of A and BBD's Value grade of D.
KB 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 KB is likely the superior value option right now.
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KB Financial Group Inc (KB) : Free Stock Analysis Report
Banco Bradesco SA (BBD) : Free Stock Analysis Report
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