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Investors interested in stocks from the Banks - Foreign sector have probably already heard of Mizuho (MFG) and Bancolombia (CIB). 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, Mizuho has a Zacks Rank of #2 (Buy), while Bancolombia has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that MFG likely has seen a stronger improvement to its earnings outlook than CIB has recently. 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.
MFG currently has a forward P/E ratio of 9.05, while CIB has a forward P/E of 14.04. We also note that MFG has a PEG ratio of 1.53. 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. CIB currently has a PEG ratio of 1.56.
Another notable valuation metric for MFG is its P/B ratio of 0.39. 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, CIB has a P/B of 0.74.
These are just a few of the metrics contributing to MFG's Value grade of B and CIB's Value grade of C.
MFG sticks out from CIB in both our Zacks Rank and Style Scores models, so value investors will likely feel that MFG is the better option right now.
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Mizuho Financial Group, Inc. (MFG) : Free Stock Analysis Report
BanColombia S.A. (CIB) : Free Stock Analysis Report
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