DNBBY vs. RY: Which Stock Is the Better Value Option?
Investors interested in stocks from the Banks - Foreign sector have probably already heard of DNB Bank ASA (DNBBY) and Royal Bank (RY). 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, DNB Bank ASA has a Zacks Rank of #2 (Buy), while Royal Bank has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that DNBBY has an improving earnings outlook. But this is just one piece of the puzzle 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.
DNBBY currently has a forward P/E ratio of 8.55, while RY has a forward P/E of 13.06. We also note that DNBBY has a PEG ratio of 1.57. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. RY currently has a PEG ratio of 1.74.
Another notable valuation metric for DNBBY is its P/B ratio of 1.32. 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, RY has a P/B of 1.89.
These are just a few of the metrics contributing to DNBBY's Value grade of B and RY's Value grade of F.
DNBBY sticks out from RY in both our Zacks Rank and Style Scores models, so value investors will likely feel that DNBBY is the better option right now.
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DNB Bank ASA (DNBBY) : Free Stock Analysis Report
Royal Bank Of Canada (RY) : Free Stock Analysis Report