You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating indiv idual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
SI vs. CFR: Which Stock Is the Better Value Option?
Investors interested in stocks from the Banks - Southwest sector have probably already heard of Silvergate Capital Corporation and Cullen/Frost Bankers (CFR - 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, Silvergate Capital Corporation has a Zacks Rank of #2 (Buy), while Cullen/Frost Bankers has a Zacks Rank of #4 (Sell). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that SI has an improving earnings outlook. But this is only part of the picture for value investors.
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.
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.
SI currently has a forward P/E ratio of 5.66, while CFR has a forward P/E of 9.97. We also note that SI has a PEG ratio of 0.15. 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. CFR currently has a PEG ratio of 1.05.
Another notable valuation metric for SI is its P/B ratio of 0.04. 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, CFR has a P/B of 2.25.
These metrics, and several others, help SI earn a Value grade of A, while CFR has been given a Value grade of D.
SI stands above CFR thanks to its solid earnings outlook, and based on these valuation figures, we also feel that SI is the superior value option right now.