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TD vs. BCH: Which Stock Is the Better Value Option?

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Investors interested in Banks - Foreign stocks are likely familiar with Toronto-Dominion Bank (TD - Free Report) and Banco De Chile (BCH - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Toronto-Dominion Bank and Banco De Chile are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that TD has an improving earnings outlook. 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 grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

TD currently has a forward P/E ratio of 12.07, while BCH has a forward P/E of 15.65. We also note that TD has a PEG ratio of 1.05. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. BCH currently has a PEG ratio of 2.80.

Another notable valuation metric for TD is its P/B ratio of 1.73. 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, BCH has a P/B of 2.52.

These are just a few of the metrics contributing to TD's Value grade of B and BCH's Value grade of C.

TD has seen stronger estimate revision activity and sports more attractive valuation metrics than BCH, so it seems like value investors will conclude that TD is the superior option right now.


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Toronto Dominion Bank (The) (TD) - free report >>

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