SVNLY or NABZY: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Banks - Foreign sector have probably already heard of Svenska Handelsbanken Ab Publ (SVNLY) and National Australia Bank Ltd. (NABZY). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Svenska Handelsbanken Ab Publ has a Zacks Rank of #2 (Buy), while National Australia Bank Ltd. has a Zacks Rank of #3 (Hold) right now. This means that SVNLY's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
SVNLY currently has a forward P/E ratio of 6.91, while NABZY has a forward P/E of 11.49. We also note that SVNLY has a PEG ratio of 1.54. 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. NABZY currently has a PEG ratio of 1.91.
Another notable valuation metric for SVNLY is its P/B ratio of 0.96. 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, NABZY has a P/B of 1.37.
These metrics, and several others, help SVNLY earn a Value grade of B, while NABZY has been given a Value grade of D.
SVNLY 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 SVNLY is likely the superior value option right now.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Svenska Handelsbanken Ab Publ (SVNLY) : Free Stock Analysis Report
National Australia Bank Ltd. (NABZY) : Free Stock Analysis Report
