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USB or NTRS: Which Is the Better Value Stock Right Now?

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Investors interested in Banks - Major Regional stocks are likely familiar with U.S. Bancorp (USB - Free Report) and Northern Trust Corporation (NTRS - 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.

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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

U.S. Bancorp and Northern Trust Corporation are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that USB likely has seen a stronger improvement to its earnings outlook than NTRS has recently. But this is only part of the picture for value investors.

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.

USB currently has a forward P/E ratio of 11.22, while NTRS has a forward P/E of 15.99. We also note that USB has a PEG ratio of 1.01. 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. NTRS currently has a PEG ratio of 1.27.

Another notable valuation metric for USB is its P/B ratio of 1.48. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, NTRS has a P/B of 2.4.

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

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


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