Investors interested in Banks - Foreign stocks are likely familiar with Banco Do Brasil SA (BDORY) and Sumitomo Mitsui (SMFG). 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, Banco Do Brasil SA is sporting a Zacks Rank of #1 (Strong Buy), while Sumitomo Mitsui has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that BDORY likely has seen a stronger improvement to its earnings outlook than SMFG has recently. 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.

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.

BDORY currently has a forward P/E ratio of 4.24, while SMFG has a forward P/E of 33.38. We also note that BDORY has a PEG ratio of 1.51. 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. SMFG currently has a PEG ratio of 1.96.

Another notable valuation metric for BDORY is its P/B ratio of 0.81. 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, SMFG has a P/B of 0.97.

Based on these metrics and many more, BDORY holds a Value grade of B, while SMFG has a Value grade of C.

BDORY stands above SMFG thanks to its solid earnings outlook, and based on these valuation figures, we also feel that BDORY is the superior value option right now.

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Banco Do Brasil SA (BDORY):Free Stock Analysis Report

Sumitomo Mitsui Financial Group Inc (SMFG):Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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