KB or RY: Which Is the Better Value Stock Right Now?
Investors with an interest in Banks - Foreign stocks have likely encountered both KB Financial (KB) and Royal Bank (RY). 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.
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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
KB Financial and Royal Bank are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that KB is likely seeing its earnings outlook improve to a greater extent. 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.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
KB currently has a forward P/E ratio of 6.07, while RY has a forward P/E of 14.27. We also note that KB has a PEG ratio of 1.23. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. RY currently has a PEG ratio of 2.75.
Another notable valuation metric for KB is its P/B ratio of 0.44. 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, RY has a P/B of 1.81.
These metrics, and several others, help KB earn a Value grade of B, while RY has been given a Value grade of C.
KB sticks out from RY in both our Zacks Rank and Style Scores models, so value investors will likely feel that KB is the better option right now.
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KB Financial Group Inc (KB) : Free Stock Analysis Report
Royal Bank Of Canada (RY) : Free Stock Analysis Report
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