Back to top

Image: Bigstock

FSB or NBHC: Which Is the Better Value Stock Right Now?

Read MoreHide Full Article

Investors looking for stocks in the Banks - Southeast sector might want to consider either Franklin Financial Network or National Bank Holdings (NBHC - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Both Franklin Financial Network and National Bank Holdings have a Zacks Rank of # 2 (Buy) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. However, value investors will care about much more than just this.

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.

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.

FSB currently has a forward P/E ratio of 14, while NBHC has a forward P/E of 18.94. We also note that FSB has a PEG ratio of 1.40. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. NBHC currently has a PEG ratio of 1.89.

Another notable valuation metric for FSB is its P/B ratio of 1.70. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, NBHC has a P/B of 1.83.

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

Both FSB and NBHC are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that FSB is the superior value option right now.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


National Bank Holdings Corporation (NBHC) - free report >>