Which stock offers the better value option?

Investors interested in stocks from the Banks – Foreign sector have probably heard of Intesa Sanpaolo SpA (ISNPY) and Toronto-Dominion Bank (TD). But which of these two stocks currently offers investors the better value opportunity? Let’s take a closer look.

Everyone has their own methods for finding great value opportunities, but our model combines 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.

Currently, Intesa Sanpaolo SpA has a Zacks Rank of #2 (Buy), while Toronto-Dominion Bank has a Zacks Rank of #4 (Sell). Investors should be comfortable knowing that ISNPY’s earnings outlook has likely improved more than TD’s recently. However, for value investors, this is only part of the picture.

Value investors also tend to use a set of traditional, tried-and-tested numbers to find stocks that they believe are undervalued at their current price levels.

Our Value category evaluates stocks using a number of key metrics, including the tried-and-true P/E, P/S, earnings yield and cash flow per share, as well as a number of other fundamental metrics commonly used by value investors.

ISNPY currently has a forward P/E ratio of 7.18, while TD has a forward P/E ratio of 9.21. We also note that ISNPY has a PEG ratio of 0.34. This popular number is similar to the widely used P/E ratio, but the PEG ratio also takes into account a company’s expected EPS growth rate. TD currently has a PEG ratio of 1.15.

Another important valuation metric for ISNPY is its P/B ratio of 0.74. The P/B ratio compares a stock’s market value to its book value, which is defined as total assets minus total liabilities. For comparison, TD has a P/B ratio of 1.48.

These and some other metrics help ISNPY get a B rating, while TD gets a C rating.

ISNPY stands out from the crowd compared to TD in both our Zacks Rank and Style Scores models, so value investors likely consider ISNPY to be the better option right now.

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Intesa Sanpaolo SpA (ISNPY): Free Stock Analysis Report

Toronto Dominion Bank (The) (TD): Free Stock Analysis Report

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