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KB vs. RY: Which Stock Is the Better Value Option?

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Investors interested in Banks - Foreign stocks are likely familiar with KB Financial (KB) and Royal Bank (RY). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

KB Financial and Royal Bank are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that KB has an improving earnings outlook. But this is just one factor that value investors are interested in.

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 6.57, while RY has a forward P/E of 12.65. We also note that KB has a PEG ratio of 1.33. 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. RY currently has a PEG ratio of 1.81.

Another notable valuation metric for KB is its P/B ratio of 0.53. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, RY has a P/B of 1.95.

These metrics, and several others, help KB earn a Value grade of A, while RY has been given a Value grade of F.

KB sticks out from RY 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
 
Royal Bank Of Canada (RY) : Free Stock Analysis Report
 
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Zacks Investment Research