Yahoo Finance SHG vs. UOVEY: Which Stock Is the Better Value Option?
Investors looking for stocks in the Banks - Foreign sector might want to consider either Shinhan Financial (SHG) or United Overseas Bank Ltd. (UOVEY). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Shinhan Financial has a Zacks Rank of #2 (Buy), while United Overseas Bank Ltd. has a Zacks Rank of #3 (Hold) right now. This means that SHG's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture for value investors.
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.
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.
SHG currently has a forward P/E ratio of 5.47, while UOVEY has a forward P/E of 8.96. We also note that SHG has a PEG ratio of 0.58. 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. UOVEY currently has a PEG ratio of 7.86.
Another notable valuation metric for SHG is its P/B ratio of 0.38. 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, UOVEY has a P/B of 1.11.
These are just a few of the metrics contributing to SHG's Value grade of B and UOVEY's Value grade of D.
SHG stands above UOVEY thanks to its solid earnings outlook, and based on these valuation figures, we also feel that SHG is the superior value option right now.
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Shinhan Financial Group Co Ltd (SHG) : Free Stock Analysis Report
United Overseas Bank Ltd. (UOVEY) : Free Stock Analysis Report
