ISNPY vs. HDB: Which Stock Is the Better Value Option?
Investors looking for stocks in the Banks - Foreign sector might want to consider either Intesa Sanpaolo SpA (ISNPY) or 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.
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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Intesa Sanpaolo SpA has a Zacks Rank of #2 (Buy), while HDFC Bank has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that ISNPY has an improving earnings outlook. But this is just one factor that value investors are interested in.
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.
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.
ISNPY currently has a forward P/E ratio of 7.20, while HDB has a forward P/E of 20.80. We also note that ISNPY has a PEG ratio of 0.55. 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. HDB currently has a PEG ratio of 0.96.
Another notable valuation metric for ISNPY is its P/B ratio of 0.41. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, HDB has a P/B of 3.39.
These metrics, and several others, help ISNPY earn a Value grade of B, while HDB has been given a Value grade of D.
ISNPY stands above HDB thanks to its solid earnings outlook, and based on these valuation figures, we also feel that ISNPY is the superior value option right now.
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