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BDORY vs. HDB: Which Stock Is the Better Value Option?

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Investors interested in Banks - Foreign stocks are likely familiar with Banco Do Brasil SA (BDORY - Free Report) and HDFC Bank (HDB - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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.

Banco Do Brasil SA has a Zacks Rank of #1 (Strong Buy), while HDFC Bank has a Zacks Rank of #2 (Buy) right now. Investors should feel comfortable knowing that BDORY likely has seen a stronger improvement to its earnings outlook than HDB has recently. But this is only part of the picture for value investors.

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 highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

BDORY currently has a forward P/E ratio of 3.81, while HDB has a forward P/E of 19.32. We also note that BDORY has a PEG ratio of 0.22. 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. HDB currently has a PEG ratio of 0.89.

Another notable valuation metric for BDORY is its P/B ratio of 0.68. 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, HDB has a P/B of 3.17.

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

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


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