UBS: UBS Group vs. Credit Suisse: Which Bank Stock is a Better Buy?

Bank stocks are taking center stage now that the top financial institutions compete for the onslaught of consumer spending. Consumers had record savings rates this past year while quarantining indoors during the pandemic.

Now that the economy is building momentum, top banks will extend loans and catalyze ongoing economic activity all the more. Perhaps the only thing that can stop the banks from raking in cash in the year ahead is a major economic recession spurred by COVID variants that breakthrough vaccine protection.

UBS Group (UBS - Get Rating) and Credit Suisse (CS - Get Rating) are two bank stocks worthy of investor attention as of the second week of August. Below, I’ll provide a look at each of these stocks to help investors make the right choice.

UBS Group (UBS - Get Rating)

UBS is a worldwide wealth management, asset management, universal bank, and investment bank services, provider. UBS has a forward P/E ratio of 9.32. This is a relatively low ratio that indicates UBS is underpriced at $17.05 per share. UBS has a 52-week high of $17.09. The stock has a 52-week low of $10.39.

UBS has an overall grade of B, which translates into a Buy rating in our POWR Ratings service. UBS has a grade of A for Sentiment and Bs in the Value and Stability components. Investors can find out how UBS fares in the Growth, Momentum, and Quality components by clicking here.

Of the nearly 100 stocks in the Foreign Banks industry, UBS is ranked in the top 10, slotting in at eighth. You can find other top stocks in this industry by clicking here.

Credit Suisse (CS - Get Rating)

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CS provides banking services, investment products, insurance, and financial advisory services in addition to pension solutions. The company’s First Boston wing offers investment research, asset management, securities underwriting, venture capital, and more. CS was in the news for all the wrong reasons this past April when it slashed its dividend and even waived bonuses following the mammoth financial loss suffered from its Archegos Capital fiasco.

The fund’s meltdown earlier this year led to a nearly $5 billion charge taken by CS. CS has a beta of 1.39, which indicates the stock is more volatile than the market. CS has a 52-week high of $14.95, and its 52-week low is $9.28. CS has an overall grade of C and a Neutral rating in our POWR Ratings service. The stock has a grade of D in the Growth component and Cs in the Sentiment and Value components.

You can find out how CS grades in the Momentum, Stability, and Quality component by clicking here. Out of the 98 publicly traded companies in the Foreign Banks industry, CS is ranked 71st.

Which is the Better Buy?

UBS has the better rating in the POWR Ratings, so it is the better of these two banking stocks right now. However, CS has the potential to ascend to a higher rating in the quarters to come. In the meantime, consider adding UBS to your portfolio.

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UBS shares rose $0.02 (+0.12%) in premarket trading Friday. Year-to-date, UBS has gained 21.43%, versus a 19.95% rise in the benchmark S&P 500 index during the same period.

About the Author: Patrick Ryan

Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management. More...