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ACBI vs. TCF: Which Stock Is the Better Value Option?

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Investors looking for stocks in the Banks - Northeast sector might want to consider either Atlantic Capital Bancshares (ACBI - Free Report) or Chemical Financial (TCF - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? 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.

Atlantic Capital Bancshares and Chemical Financial are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that ACBI's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst 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.

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.

ACBI currently has a forward P/E ratio of 13.26, while TCF has a forward P/E of 15.83. We also note that ACBI has a PEG ratio of 1.26. 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. TCF currently has a PEG ratio of 1.61.

Another notable valuation metric for ACBI is its P/B ratio of 1.11. 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, TCF has a P/B of 1.23.

These are just a few of the metrics contributing to ACBI's Value grade of A and TCF's Value grade of C.

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

In-Depth Zacks Research for the Tickers Above

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Atlantic Capital Bancshares, Inc. (ACBI) - free report >>

TCF Financial Corporation (TCF) - free report >>

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