Back to top

Image: Bigstock

FHB vs. FRC: Which Stock Should Value Investors Buy Now?

Read MoreHide Full Article

Investors interested in Banks - West stocks are likely familiar with First Hawaiian (FHB - Free Report) and First Republic Bank (FRC - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? 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.

Right now, both First Hawaiian and First Republic Bank are sporting a Zacks Rank of # 2 (Buy). Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. However, value investors will care about much more than just this.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.

FHB currently has a forward P/E ratio of 14.89, while FRC has a forward P/E of 25.68. We also note that FHB has a PEG ratio of 1.28. 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. FRC currently has a PEG ratio of 1.64.

Another notable valuation metric for FHB is its P/B ratio of 1.32. 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, FRC has a P/B of 2.86.

Based on these metrics and many more, FHB holds a Value grade of B, while FRC has a Value grade of F.

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


In-Depth Zacks Research for the Tickers Above


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


First Hawaiian, Inc. (FHB) - free report >>

First Republic Bank (FRC) - free report >>

Published in