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BY or SBNY: Which Is the Better Value Stock Right Now?

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Investors looking for stocks in the Banks - Northeast sector might want to consider either Byline Bancorp (BY - Free Report) or Signature Bank (SBNY - 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Currently, both Byline Bancorp and Signature Bank 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. But this is just one factor that value investors are interested in.

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.

BY currently has a forward P/E ratio of 11.83, while SBNY has a forward P/E of 19.49. We also note that BY has a PEG ratio of 1.18. 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. SBNY currently has a PEG ratio of 2.05.

Another notable valuation metric for BY is its P/B ratio of 1.11. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, SBNY has a P/B of 2.07.

These metrics, and several others, help BY earn a Value grade of B, while SBNY has been given a Value grade of F.

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


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