Yahoo Finance KB or ITUB: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Banks - Foreign sector might want to consider either KB Financial (KB) or Banco Itau (ITUB). 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, KB Financial has a Zacks Rank of #2 (Buy), while Banco Itau has a Zacks Rank of #4 (Sell). Investors should feel comfortable knowing that KB likely has seen a stronger improvement to its earnings outlook than ITUB has recently. However, value investors will care about much more than just this.
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.
KB currently has a forward P/E ratio of 4.97, while ITUB has a forward P/E of 7.85. We also note that KB has a PEG ratio of 0.36. 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. ITUB currently has a PEG ratio of 0.82.
Another notable valuation metric for KB is its P/B ratio of 0.42. 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, ITUB has a P/B of 1.66.
These are just a few of the metrics contributing to KB's Value grade of A and ITUB's Value grade of C.
KB is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that KB is likely the superior value option right now.
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KB Financial Group Inc (KB) : Free Stock Analysis Report
Itau Unibanco Holding S.A. (ITUB) : Free Stock Analysis Report
