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Investors interested in Banks - Foreign stocks are likely familiar with Societe Generale Group (SCGLY) and Erste Group Bank AG (EBKDY). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive 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.
Currently, Societe Generale Group has a Zacks Rank of #2 (Buy), while Erste Group Bank AG has a Zacks Rank of #4 (Sell). Investors should feel comfortable knowing that SCGLY likely has seen a stronger improvement to its earnings outlook than EBKDY 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.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
SCGLY currently has a forward P/E ratio of 7.50, while EBKDY has a forward P/E of 8.80. We also note that SCGLY has a PEG ratio of 0.28. 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. EBKDY currently has a PEG ratio of 1.11.
Another notable valuation metric for SCGLY 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, EBKDY has a P/B of 0.91.
These are just a few of the metrics contributing to SCGLY's Value grade of A and EBKDY's Value grade of F.
SCGLY sticks out from EBKDY in both our Zacks Rank and Style Scores models, so value investors will likely feel that SCGLY is the better option right now.
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Societe Generale Group (SCGLY) : Free Stock Analysis Report
Erste Group Bank AG (EBKDY) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).