Yahoo Finance BAP vs. IBN: Which Stock Is the Better Value Option?
Investors interested in stocks from the Banks - Foreign sector have probably already heard of Credicorp (BAP) and ICICI Bank Limited (IBN). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. 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.
Credicorp has a Zacks Rank of #2 (Buy), while ICICI Bank Limited has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that BAP is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when 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.
BAP currently has a forward P/E ratio of 7.49, while IBN has a forward P/E of 17.89. We also note that BAP has a PEG ratio of 0.41. 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. IBN currently has a PEG ratio of 2.04.
Another notable valuation metric for BAP 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, IBN has a P/B of 2.90.
These metrics, and several others, help BAP earn a Value grade of A, while IBN has been given a Value grade of D.
BAP has seen stronger estimate revision activity and sports more attractive valuation metrics than IBN, so it seems like value investors will conclude that BAP is the superior option right now.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Credicorp Ltd. (BAP) : Free Stock Analysis Report
ICICI Bank Limited (IBN) : Free Stock Analysis Report
