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EWBC vs. SIVB: Which Stock Should Value Investors Buy Now?

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Investors looking for stocks in the Banks - West sector might want to consider either East West Bancorp (EWBC - Free Report) or SVB Financial (SIVB - 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.

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 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, East West Bancorp has a Zacks Rank of #2 (Buy), while SVB Financial has a Zacks Rank of #3 (Hold). This means that EWBC'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 analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.

EWBC currently has a forward P/E ratio of 12.77, while SIVB has a forward P/E of 19.01. We also note that EWBC 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. SIVB currently has a PEG ratio of 2.38.

Another notable valuation metric for EWBC is its P/B ratio of 1.96. 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, SIVB has a P/B of 3.26.

These metrics, and several others, help EWBC earn a Value grade of B, while SIVB has been given a Value grade of C.

EWBC stands above SIVB thanks to its solid earnings outlook, and based on these valuation figures, we also feel that EWBC is the superior value option right now.


In-Depth Zacks Research for the Tickers Above


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East West Bancorp, Inc. (EWBC) - free report >>

SVB Financial Group (SIVB) - free report >>

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