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Investors with an interest in Banks - Foreign stocks have likely encountered both Mizuho (MFG) and Bancolombia (CIB). 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Right now, Mizuho is sporting a Zacks Rank of #2 (Buy), while Bancolombia has a Zacks Rank of #3 (Hold). This means that MFG's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture 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 Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
MFG currently has a forward P/E ratio of 9.61, while CIB has a forward P/E of 15.90. We also note that MFG has a PEG ratio of 1.34. 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. CIB currently has a PEG ratio of 1.36.
Another notable valuation metric for MFG is its P/B ratio of 0.41. 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, CIB has a P/B of 0.96.
These are just a few of the metrics contributing to MFG's Value grade of B and CIB's Value grade of C.
MFG has seen stronger estimate revision activity and sports more attractive valuation metrics than CIB, so it seems like value investors will conclude that MFG is the superior option right now.
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Mizuho Financial Group, Inc. (MFG) : Free Stock Analysis Report
BanColombia S.A. (CIB) : Free Stock Analysis Report
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