EBKDY vs. HDB: Which Stock Is the Better Value Option?
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Investors with an interest in Banks - Foreign stocks have likely encountered both Erste Group Bank AG (EBKDY) and HDFC Bank (HDB). 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Right now, Erste Group Bank AG is sporting a Zacks Rank of #2 (Buy), while HDFC Bank has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that EBKDY likely has seen a stronger improvement to its earnings outlook than HDB has recently. But this is only part of the picture for value investors.
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.
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.
EBKDY currently has a forward P/E ratio of 6.14, while HDB has a forward P/E of 18.95. We also note that EBKDY has a PEG ratio of 0.78. 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. HDB currently has a PEG ratio of 1.10.
Another notable valuation metric for EBKDY is its P/B ratio of 0.77. 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, HDB has a P/B of 1.93.
These metrics, and several others, help EBKDY earn a Value grade of B, while HDB has been given a Value grade of C.
EBKDY is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that EBKDY is likely the superior value option right now.
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Erste Group Bank AG (EBKDY) : Free Stock Analysis Report
HDFC Bank Limited (HDB) : Free Stock Analysis Report