Back to top

Image: Bigstock

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

Read MoreHide Full Article

Investors looking for stocks in the Banks - Northeast sector might want to consider either 1st Constitution Bancorp or Community Bank System (CBU - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Both 1st Constitution Bancorp and Community Bank System have a Zacks Rank of # 2 (Buy) right now. This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. However, value investors will care about much more than just this.

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 highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

FCCY currently has a forward P/E ratio of 12.04, while CBU has a forward P/E of 19.54. We also note that FCCY has a PEG ratio of 1.51. 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 2.44.

Another notable valuation metric for FCCY is its P/B ratio of 1.25. 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, CBU has a P/B of 1.87.

These are just a few of the metrics contributing to FCCY's Value grade of B and CBU's Value grade of D.

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


See More Zacks Research for These Tickers


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


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

Published in