SHG or TD: Which Is the Better Value Stock Right Now?

Investors looking for stocks in the Banks - Foreign sector might want to consider either Shinhan Financial (SHG) or Toronto-Dominion Bank (TD). 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Shinhan Financial and Toronto-Dominion Bank are both sporting a Zacks Rank of # 1 (Strong Buy) right now. Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. 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.

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.

SHG currently has a forward P/E ratio of 5.90, while TD has a forward P/E of 10.80. We also note that SHG has a PEG ratio of 0.72. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. TD currently has a PEG ratio of 1.41.

Another notable valuation metric for SHG is its P/B ratio of 0.57. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, TD has a P/B of 1.79.

These are just a few of the metrics contributing to SHG's Value grade of A and TD's Value grade of C.

Both SHG and TD are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that SHG is the superior value option right now.

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Shinhan Financial Group Co Ltd (SHG) : Free Stock Analysis Report
 
Toronto Dominion Bank (The) (TD) : Free Stock Analysis Report
 
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