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HSBC vs. CM: Which Stock Should Value Investors Buy Now?
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Investors with an interest in Banks - Foreign stocks have likely encountered both HSBC (HSBC - 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.
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.
HSBC and Canadian Imperial Bank are sporting Zacks Ranks of #1 (Strong Buy) and #4 (Sell), respectively, right now. This means that HSBC's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture for value investors.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
HSBC currently has a forward P/E ratio of 5.59, while CM has a forward P/E of 7.89. We also note that HSBC has a PEG ratio of 0.25. 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. CM currently has a PEG ratio of 2.61.
Another notable valuation metric for HSBC is its P/B ratio of 0.83. 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, CM has a P/B of 1.04.
These metrics, and several others, help HSBC earn a Value grade of B, while CM has been given a Value grade of C.
HSBC has seen stronger estimate revision activity and sports more attractive valuation metrics than CM, so it seems like value investors will conclude that HSBC is the superior option right now.
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HSBC vs. CM: Which Stock Should Value Investors Buy Now?
Investors with an interest in Banks - Foreign stocks have likely encountered both HSBC (HSBC - 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.
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.
HSBC and Canadian Imperial Bank are sporting Zacks Ranks of #1 (Strong Buy) and #4 (Sell), respectively, right now. This means that HSBC's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture for value investors.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
HSBC currently has a forward P/E ratio of 5.59, while CM has a forward P/E of 7.89. We also note that HSBC has a PEG ratio of 0.25. 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. CM currently has a PEG ratio of 2.61.
Another notable valuation metric for HSBC is its P/B ratio of 0.83. 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, CM has a P/B of 1.04.
These metrics, and several others, help HSBC earn a Value grade of B, while CM has been given a Value grade of C.
HSBC has seen stronger estimate revision activity and sports more attractive valuation metrics than CM, so it seems like value investors will conclude that HSBC is the superior option right now.