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FBP vs. VBTX: Which Stock Is the Better Value Option?

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Investors interested in Banks - Southeast stocks are likely familiar with First Bancorp (FBP - Free Report) and Veritex Holdings (VBTX - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, First Bancorp has a Zacks Rank of #2 (Buy), while Veritex Holdings has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that FBP has an improving earnings outlook. But this is just one piece of the puzzle for value investors.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.

FBP currently has a forward P/E ratio of 14.16, while VBTX has a forward P/E of 15.37. We also note that FBP has a PEG ratio of 0.40. 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. VBTX currently has a PEG ratio of 1.54.

Another notable valuation metric for FBP is its P/B ratio of 1.01. 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, VBTX has a P/B of 1.30.

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

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


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First BanCorp. (FBP) - free report >>

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