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

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Investors interested in stocks from the Banks - West sector have probably already heard of Zions (ZION - Free Report) and First Republic Bank (FRC - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Zions and First Republic Bank are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that ZION is likely seeing its earnings outlook improve to a greater extent. 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.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

ZION currently has a forward P/E ratio of 8.69, while FRC has a forward P/E of 18.43. We also note that ZION has a PEG ratio of 2.23. 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 2.45.

Another notable valuation metric for ZION is its P/B ratio of 1.31. 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, FRC has a P/B of 2.19.

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

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


In-Depth Zacks Research for the Tickers Above


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Zions Bancorporation, N.A. (ZION) - free report >>

First Republic Bank (FRC) - free report >>

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