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UBS vs. BAP: Which Stock Is the Better Value Option?

Investors interested in stocks from the Banks - Foreign sector have probably already heard of UBS (UBS) and Credicorp (BAP). But which of these two companies is the best option for those looking for undervalued stocks? 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Right now, UBS is sporting a Zacks Rank of #2 (Buy), while Credicorp has a Zacks Rank of #3 (Hold). This means that UBS'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 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 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.

UBS currently has a forward P/E ratio of 10.85, while BAP has a forward P/E of 14.30. We also note that UBS has a PEG ratio of 2.75. 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. BAP currently has a PEG ratio of 3.33.

Another notable valuation metric for UBS is its P/B ratio of 0.75. 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, BAP has a P/B of 1.51.

These are just a few of the metrics contributing to UBS's Value grade of A and BAP's Value grade of C.

UBS sticks out from BAP in both our Zacks Rank and Style Scores models, so value investors will likely feel that UBS is the better option right now.

Click to get this free report UBS Group AG (UBS) : Free Stock Analysis Report Credicorp Ltd. (BAP) : Free Stock Analysis Report To read this article on Zacks.com click here.

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