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CIB vs. UOVEY: Which Stock Is the Better Value Option?

Zacks Equity Research
·2-min read

Investors interested in Banks - Foreign stocks are likely familiar with Bancolombia (CIB) and United Overseas Bank Ltd. (UOVEY). 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.

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.

Bancolombia has a Zacks Rank of #1 (Strong Buy), while United Overseas Bank Ltd. has a Zacks Rank of #4 (Sell) right now. Investors should feel comfortable knowing that CIB likely has seen a stronger improvement to its earnings outlook than UOVEY has recently. 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.

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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.

CIB currently has a forward P/E ratio of 6.53, while UOVEY has a forward P/E of 10.61. We also note that CIB has a PEG ratio of 0.40. 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. UOVEY currently has a PEG ratio of 0.68.

Another notable valuation metric for CIB is its P/B ratio of 0.92. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, UOVEY has a P/B of 1.08.

These metrics, and several others, help CIB earn a Value grade of B, while UOVEY has been given a Value grade of C.

CIB has seen stronger estimate revision activity and sports more attractive valuation metrics than UOVEY, so it seems like value investors will conclude that CIB is the superior option right now.


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BanColombia S.A. (CIB) : Free Stock Analysis Report
 
United Overseas Bank Ltd. (UOVEY) : Free Stock Analysis Report
 
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Zacks Investment Research