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ING or CM: Which Is the Better Value Stock Right Now?

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Investors with an interest in Banks - Foreign stocks have likely encountered both ING Groep (ING - Free Report) and Canadian Imperial Bank (CM - Free Report) . 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.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. 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.

Right now, ING Groep is sporting a Zacks Rank of #2 (Buy), while Canadian Imperial Bank has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that ING is likely seeing its earnings outlook improve to a greater extent. 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.

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.

ING currently has a forward P/E ratio of 9.48, while CM has a forward P/E of 9.99. We also note that ING has a PEG ratio of 0.38. 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. CM currently has a PEG ratio of 0.91.

Another notable valuation metric for ING is its P/B ratio of 0.82. 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, CM has a P/B of 1.56.

These metrics, and several others, help ING earn a Value grade of A, while CM has been given a Value grade of C.

ING 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 ING is likely the superior value option right now.


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