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UBS vs. BBD: Which Stock Should Value Investors Buy Now?

Zacks Equity Research
·2 min read

Investors interested in stocks from the Banks - Foreign sector have probably already heard of UBS (UBS) and Banco Bradesco (BBD). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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.

UBS has a Zacks Rank of #2 (Buy), while Banco Bradesco has a Zacks Rank of #5 (Strong Sell) right now. This means that UBS's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when 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.

UBS currently has a forward P/E ratio of 9.28, while BBD has a forward P/E of 12.18. We also note that UBS has a PEG ratio of 1.28. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. BBD currently has a PEG ratio of 2.94.

Another notable valuation metric for UBS is its P/B ratio of 0.76. 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, BBD has a P/B of 1.42.

These are just a few of the metrics contributing to UBS's Value grade of B and BBD's Value grade of D.

UBS sticks out from BBD in both our Zacks Rank and Style Scores models, so value investors will likely feel that UBS is the better option right now.


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UBS Group AG (UBS) : Free Stock Analysis Report
 
Banco Bradesco SA (BBD) : Free Stock Analysis Report
 
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Zacks Investment Research