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DNBBY vs. TD: Which Stock Is the Better Value Option?

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Investors looking for stocks in the Banks - Foreign sector might want to consider either DNB Bank ASA (DNBBY - Free Report) or Toronto-Dominion Bank (TD - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great 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.

Currently, DNB Bank ASA has a Zacks Rank of #2 (Buy), while Toronto-Dominion Bank has a Zacks Rank of #3 (Hold). This means that DNBBY'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 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.

DNBBY currently has a forward P/E ratio of 7.98, while TD has a forward P/E of 10.57. We also note that DNBBY has a PEG ratio of 1.47. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. TD currently has a PEG ratio of 1.80.

Another notable valuation metric for DNBBY is its P/B ratio of 1.29. 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, TD has a P/B of 1.47.

Based on these metrics and many more, DNBBY holds a Value grade of B, while TD has a Value grade of F.

DNBBY stands above TD thanks to its solid earnings outlook, and based on these valuation figures, we also feel that DNBBY is the superior value option right now.


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Toronto Dominion Bank (The) (TD) - free report >>

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