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FFNW or FRC: Which Is the Better Value Stock Right Now?

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Investors with an interest in Banks - West stocks have likely encountered both First Financial Northwest (FFNW - Free Report) and First Republic Bank . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

First Financial Northwest and First Republic Bank are sporting Zacks Ranks of #1 (Strong Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that FFNW likely has seen a stronger improvement to its earnings outlook than FRC has recently. But this is just one factor that value investors are interested in.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

FFNW currently has a forward P/E ratio of 12.69, while FRC has a forward P/E of 20.84. We also note that FFNW has a PEG ratio of 1.27. 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. FRC currently has a PEG ratio of 1.64.

Another notable valuation metric for FFNW is its P/B ratio of 1.45. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, FRC has a P/B of 2.26.

Based on these metrics and many more, FFNW holds a Value grade of B, while FRC has a Value grade of D.

FFNW sticks out from FRC in both our Zacks Rank and Style Scores models, so value investors will likely feel that FFNW is the better option right now.


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