Investors interested in Banks - Foreign stocks are likely familiar with UBS (UBS) 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, UBS has a Zacks Rank of #2 (Buy), while Bancolombia has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that UBS is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.
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.
UBS currently has a forward P/E ratio of 9.29, while CIB has a forward P/E of 53.66. We also note that UBS has a PEG ratio of 1.18. 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 4.58.
Another notable valuation metric for UBS is its P/B ratio of 0.85. 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 1.08.
Based on these metrics and many more, UBS holds a Value grade of A, while CIB has a Value grade of C.
UBS stands above CIB thanks to its solid earnings outlook, and based on these valuation figures, we also feel that UBS is the superior value 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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