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BSAC vs. IBN: Which Stock Is the Better Value Option?

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Investors interested in Banks - Foreign stocks are likely familiar with Banco Santander-Chile (BSAC - Free Report) and ICICI Bank Limited (IBN - 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.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, both Banco Santander-Chile and ICICI Bank Limited are sporting a Zacks Rank of # 2 (Buy). Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. However, value investors will care about much more than just this.

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.

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.

BSAC currently has a forward P/E ratio of 10.25, while IBN has a forward P/E of 19.26. We also note that BSAC has a PEG ratio of 0.39. 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 2.48.

Another notable valuation metric for BSAC is its P/B ratio of 1.89. 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 3.14.

Based on these metrics and many more, BSAC holds a Value grade of A, while IBN has a Value grade of C.

Both BSAC and IBN are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that BSAC is the superior value option right now.


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