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EBKDY vs. HDB: Which Stock Should Value Investors Buy Now?

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Investors with an interest in Banks - Foreign stocks have likely encountered both Erste Group Bank AG (EBKDY - Free Report) and HDFC Bank (HDB - 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 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.

Erste Group Bank AG and HDFC Bank are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that EBKDY has an improving earnings outlook. However, value investors will care about much more than just this.

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.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

EBKDY currently has a forward P/E ratio of 6.61, while HDB has a forward P/E of 19.71. We also note that EBKDY has a PEG ratio of 0.84. 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. HDB currently has a PEG ratio of 1.29.

Another notable valuation metric for EBKDY is its P/B ratio of 0.83. 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 1.98.

These metrics, and several others, help EBKDY earn a Value grade of B, while HDB has been given a Value grade of D.

EBKDY sticks out from HDB in both our Zacks Rank and Style Scores models, so value investors will likely feel that EBKDY is the better option right now.


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