MUFG or BSAC: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Banks - Foreign sector might want to consider either Mitsubishi UFJ (MUFG) or Banco Santander-Chile (BSAC). But which of these two stocks presents investors with the better value opportunity right now? 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.
Currently, Mitsubishi UFJ has a Zacks Rank of #2 (Buy), while Banco Santander-Chile has a Zacks Rank of #5 (Strong Sell). Investors should feel comfortable knowing that MUFG likely has seen a stronger improvement to its earnings outlook than BSAC has recently. But this is just one factor that value investors are interested in.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
MUFG currently has a forward P/E ratio of 10.80, while BSAC has a forward P/E of 16.59. We also note that MUFG has a PEG ratio of 0.76. 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. BSAC currently has a PEG ratio of 8.55.
Another notable valuation metric for MUFG is its P/B ratio of 0.75. 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, BSAC has a P/B of 1.83.
Based on these metrics and many more, MUFG holds a Value grade of B, while BSAC has a Value grade of F.
MUFG 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 MUFG is likely the superior value option right now.
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Mitsubishi UFJ Financial Group, Inc. (MUFG) : Free Stock Analysis Report
Banco Santander Chile (BSAC) : Free Stock Analysis Report
