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BCH or IBN: Which Is the Better Value Stock Right Now?

Zacks Equity Research
·2-min read

Investors interested in stocks from the Banks - Foreign sector have probably already heard of Banco De Chile (BCH) and ICICI Bank Limited (IBN). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Banco De Chile and ICICI Bank Limited are both sporting a Zacks Rank of # 2 (Buy) right now. Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. But this is just one factor that value investors are interested in.

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.

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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.

BCH currently has a forward P/E ratio of 6.62, while IBN has a forward P/E of 20.47. We also note that BCH has a PEG ratio of 0.81. 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. IBN currently has a PEG ratio of 0.98.

Another notable valuation metric for BCH is its P/B ratio of 1.76. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, IBN has a P/B of 2.96.

Based on these metrics and many more, BCH holds a Value grade of B, while IBN has a Value grade of D.

Both BCH and IBN are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that BCH is the superior value option right now.


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Banco De Chile (BCH) : Free Stock Analysis Report
 
ICICI Bank Limited (IBN) : Free Stock Analysis Report
 
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Zacks Investment Research