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PB or CFR: Which Is the Better Value Stock Right Now?
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Investors interested in stocks from the Banks - Southwest sector have probably already heard of Prosperity Bancshares (PB - Free Report) and Cullen/Frost Bankers (CFR - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Prosperity Bancshares and Cullen/Frost Bankers are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that PB has an improving earnings outlook. But this is just one factor that value investors are interested in.
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 Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
PB currently has a forward P/E ratio of 12.53, while CFR has a forward P/E of 16.85. We also note that PB has a PEG ratio of 1.25. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. CFR currently has a PEG ratio of 1.77.
Another notable valuation metric for PB is its P/B ratio of 1.05. 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, CFR has a P/B of 1.67.
Based on these metrics and many more, PB holds a Value grade of B, while CFR has a Value grade of C.
PB stands above CFR thanks to its solid earnings outlook, and based on these valuation figures, we also feel that PB is the superior value option right now.
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PB or CFR: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Banks - Southwest sector have probably already heard of Prosperity Bancshares (PB - Free Report) and Cullen/Frost Bankers (CFR - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Prosperity Bancshares and Cullen/Frost Bankers are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that PB has an improving earnings outlook. But this is just one factor that value investors are interested in.
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 Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
PB currently has a forward P/E ratio of 12.53, while CFR has a forward P/E of 16.85. We also note that PB has a PEG ratio of 1.25. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. CFR currently has a PEG ratio of 1.77.
Another notable valuation metric for PB is its P/B ratio of 1.05. 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, CFR has a P/B of 1.67.
Based on these metrics and many more, PB holds a Value grade of B, while CFR has a Value grade of C.
PB stands above CFR thanks to its solid earnings outlook, and based on these valuation figures, we also feel that PB is the superior value option right now.