EBKDY vs. HDB: Which Stock Should Value Investors Buy Now?
EBKDY vs. HDB: Which Stock Is the Better Value Option?
Investors interested in stocks from the Banks - Foreign sector have probably already heard of Erste Group Bank AG (EBKDY) and HDFC Bank (HDB). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, Erste Group Bank AG has a Zacks Rank of #2 (Buy), while HDFC Bank has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that EBKDY is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture 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 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 10.17, while HDB has a forward P/E of 24.35. We also note that EBKDY has a PEG ratio of 0.43. 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. HDB currently has a PEG ratio of 1.11.
Another notable valuation metric for EBKDY is its P/B ratio of 0.73. 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 3.92.
These are just a few of the metrics contributing to EBKDY's Value grade of B and HDB's 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.
Zacks Top 10 Stocks for 2022
In addition to the investment ideas discussed above, would you like to know about our 10 top picks for the entirety of 2022?
From inception in 2012 through November, the Zacks Top 10 Stocks gained an impressive +962.5% versus the S&P 500’s +329.4%. Now our Director of Research is combing through 4,000 companies covered by the Zacks Rank to handpick the best 10 tickers to buy and hold. Don’t miss your chance to get in on these stocks when they’re released on January 3.Be First To New Top 10 Stocks >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Erste Group Bank AG (EBKDY): Free Stock Analysis Report
HDFC Bank Limited (HDB): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research