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EGBN or SASR: Which Is the Better Value Stock Right Now?

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Investors with an interest in Banks - Northeast stocks have likely encountered both Eagle Bancorp (EGBN - Free Report) and Sandy Spring Bancorp (SASR - 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.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. 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.

Currently, both Eagle Bancorp and Sandy Spring Bancorp are holding a Zacks Rank of # 2 (Buy). 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 are also interested in a number of tried-and-true valuation metrics that help show when 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.

EGBN currently has a forward P/E ratio of 12.18, while SASR has a forward P/E of 12.37. We also note that EGBN has a PEG ratio of 1.58. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. SASR currently has a PEG ratio of 3.44.

Another notable valuation metric for EGBN is its P/B ratio of 1.36. 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, SASR has a P/B of 1.39.

Based on these metrics and many more, EGBN holds a Value grade of B, while SASR has a Value grade of C.

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


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Eagle Bancorp, Inc. (EGBN) - free report >>

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