SMFG or BMO: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Banks - Foreign sector might want to consider either Sumitomo Mitsui (SMFG) or Bank of Montreal (BMO). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, Sumitomo Mitsui has a Zacks Rank of #1 (Strong Buy), while Bank of Montreal has a Zacks Rank of #4 (Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that SMFG is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.
SMFG currently has a forward P/E ratio of 6.98, while BMO has a forward P/E of 10.10. We also note that SMFG has a PEG ratio of 1.19. 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. BMO currently has a PEG ratio of 1.22.
Another notable valuation metric for SMFG is its P/B ratio of 0.49. 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, BMO has a P/B of 1.52.
Based on these metrics and many more, SMFG holds a Value grade of B, while BMO has a Value grade of C.
SMFG 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 SMFG is likely the superior value option right now.
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Sumitomo Mitsui Financial Group Inc (SMFG) : Free Stock Analysis Report
Bank Of Montreal (BMO) : Free Stock Analysis Report
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