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FBP or SNV: Which Is the Better Value Stock Right Now?

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Investors looking for stocks in the Banks - Southeast sector might want to consider either First Bancorp (FBP - Free Report) or Synovus Financial (SNV - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

First Bancorp has a Zacks Rank of #2 (Buy), while Synovus Financial has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that FBP is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.

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.

FBP currently has a forward P/E ratio of 10.31, while SNV has a forward P/E of 10.54. We also note that FBP has a PEG ratio of 0.27. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. SNV currently has a PEG ratio of 0.51.

Another notable valuation metric for FBP 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, SNV has a P/B of 1.53.

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

FBP sticks out from SNV in both our Zacks Rank and Style Scores models, so value investors will likely feel that FBP is the better option right now.


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