Yahoo Finance EBKDY or HDB: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Banks - Foreign sector might want to consider either Erste Group Bank AG (EBKDY) or HDFC Bank (HDB). 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.
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.
Erste Group Bank AG has a Zacks Rank of #2 (Buy), while HDFC Bank has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that EBKDY likely has seen a stronger improvement to its earnings outlook than HDB has recently. But this is only part of the picture for value investors.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.
EBKDY currently has a forward P/E ratio of 6.31, while HDB has a forward P/E of 18.69. We also note that EBKDY has a PEG ratio of 0.80. 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 1.09.
Another notable valuation metric for EBKDY is its P/B ratio of 0.79. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, HDB has a P/B of 1.90.
Based on these metrics and many more, EBKDY holds a Value grade of B, while HDB has a Value grade of C.
EBKDY has seen stronger estimate revision activity and sports more attractive valuation metrics than HDB, so it seems like value investors will conclude that EBKDY is the superior option right now.
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Erste Group Bank AG (EBKDY) : Free Stock Analysis Report
HDFC Bank Limited (HDB) : Free Stock Analysis Report
