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FMBH or CBU: Which Is the Better Value Stock Right Now?

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Investors interested in stocks from the Banks - Northeast sector have probably already heard of First Mid-Illinois Bancshares (FMBH - Free Report) and Community Bank System (CBU - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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 Mid-Illinois Bancshares has a Zacks Rank of #2 (Buy), while Community Bank System 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 FMBH has an improving earnings outlook. But this is only part of the picture 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.

FMBH currently has a forward P/E ratio of 12.89, while CBU has a forward P/E of 18.04. We also note that FMBH has a PEG ratio of 1.43. 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. CBU currently has a PEG ratio of 2.26.

Another notable valuation metric for FMBH is its P/B ratio of 1.26. 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, CBU has a P/B of 1.79.

These metrics, and several others, help FMBH earn a Value grade of B, while CBU has been given a Value grade of C.

FMBH has seen stronger estimate revision activity and sports more attractive valuation metrics than CBU, so it seems like value investors will conclude that FMBH is the superior option right now.


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Community Bank System, Inc. (CBU) - free report >>

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