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MARKETS LIVE BLOG:

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UBS vs. CIB: Which Stock Is the Better Value Option?

Zacks Equity Research
·2 min read

Investors interested in Banks - Foreign stocks are likely familiar with UBS (UBS) and Bancolombia (CIB). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

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 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 and Bancolombia are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that UBS likely has seen a stronger improvement to its earnings outlook than CIB has recently. However, value investors will care about much more than just this.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.

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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.

UBS currently has a forward P/E ratio of 11.19, while CIB has a forward P/E of 18.19. We also note that UBS has a PEG ratio of 1.42. 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 1.55.

Another notable valuation metric for UBS is its P/B ratio of 0.93. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, CIB has a P/B of 1.10.

Based on these metrics and many more, UBS holds a Value grade of A, while CIB has a Value grade of C.

UBS sticks out from CIB 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
 
BanColombia S.A. (CIB) : Free Stock Analysis Report
 
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Zacks Investment Research