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KB vs. BBD: Which Stock Should Value Investors Buy Now?

Zacks Equity Research
·2 mins read

Investors looking for stocks in the Banks - Foreign sector might want to consider either KB Financial (KB) or Banco Bradesco (BBD). But which of these two companies is the best option for those looking for undervalued stocks? 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, KB Financial is sporting a Zacks Rank of #2 (Buy), while Banco Bradesco has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that KB is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.

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 5.30, while BBD has a forward P/E of 10.26. We also note that KB has a PEG ratio of 1.08. 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. BBD currently has a PEG ratio of 3.56.

Another notable valuation metric for KB is its P/B ratio of 0.38. 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, BBD has a P/B of 1.22.

Based on these metrics and many more, KB holds a Value grade of A, while BBD has a Value grade of D.

KB sticks out from BBD 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
 
Banco Bradesco SA (BBD) : Free Stock Analysis Report
 
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