SWDBY or IBN: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Banks - Foreign sector might want to consider either Swedbank AB (SWDBY) or ICICI Bank Limited (IBN). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
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.
Swedbank AB has a Zacks Rank of #2 (Buy), while ICICI Bank Limited has a Zacks Rank of #4 (Sell) right now. This means that SWDBY's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture for value investors.
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.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
SWDBY currently has a forward P/E ratio of 7.13, while IBN has a forward P/E of 17.38. We also note that SWDBY has a PEG ratio of 0.90. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. IBN currently has a PEG ratio of 0.92.
Another notable valuation metric for SWDBY is its P/B ratio of 1.22. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, IBN has a P/B of 2.97.
These are just a few of the metrics contributing to SWDBY's Value grade of B and IBN's Value grade of F.
SWDBY 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 SWDBY is likely the superior value option right now.
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Swedbank AB (SWDBY) : Free Stock Analysis Report
ICICI Bank Limited (IBN) : Free Stock Analysis Report
