Yahoo Finance BNS vs. DBSDY: Which Stock Is the Better Value Option?
Investors looking for stocks in the Banks - Foreign sector might want to consider either Bank of Nova Scotia (BNS) or DBS Group Holdings Ltd (DBSDY). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
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.
Currently, both Bank of Nova Scotia and DBS Group Holdings Ltd are holding a Zacks Rank of # 2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. But this is just one piece of the puzzle 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.
BNS currently has a forward P/E ratio of 9.68, while DBSDY has a forward P/E of 10.33. We also note that BNS has a PEG ratio of 1.57. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. DBSDY currently has a PEG ratio of 8.61.
Another notable valuation metric for BNS is its P/B ratio of 1.09. 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, DBSDY has a P/B of 1.71.
These are just a few of the metrics contributing to BNS's Value grade of B and DBSDY's Value grade of D.
Both BNS and DBSDY are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that BNS is the superior value option right now.
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Bank of Nova Scotia (The) (BNS) : Free Stock Analysis Report
DBS Group Holdings Ltd (DBSDY) : Free Stock Analysis Report
