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Investors interested in Banks - Foreign stocks are likely familiar with United Overseas Bank Ltd. (UOVEY) and ICICI Bank Limited (IBN). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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.
United Overseas Bank Ltd. has a Zacks Rank of #2 (Buy), while ICICI Bank Limited has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that UOVEY 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 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.
UOVEY currently has a forward P/E ratio of 9.83, while IBN has a forward P/E of 19.17. We also note that UOVEY has a PEG ratio of 1.55. 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 1.58.
Another notable valuation metric for UOVEY is its P/B ratio of 1.24. 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, IBN has a P/B of 2.84.
Based on these metrics and many more, UOVEY holds a Value grade of B, while IBN has a Value grade of D.
UOVEY stands above IBN thanks to its solid earnings outlook, and based on these valuation figures, we also feel that UOVEY is the superior value option right now.
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United Overseas Bank Ltd. (UOVEY) : Free Stock Analysis Report
ICICI Bank Limited (IBN) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).