Investors looking for stocks in the Banks - West sector might want to consider either Bank of Commerce (BOCH - Free Report) or Peoples Utah Bancorp (PUB - 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Both Bank of Commerce and Peoples Utah Bancorp have a Zacks Rank of # 2 (Buy) right now. This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. But this is only part of the picture for value investors.
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 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.
BOCH currently has a forward P/E ratio of 15, while PUB has a forward P/E of 17.95. We also note that BOCH has a PEG ratio of 2.14. 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. PUB currently has a PEG ratio of 2.24.
Another notable valuation metric for BOCH is its P/B ratio of 1.53. 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, PUB has a P/B of 2.61.
These metrics, and several others, help BOCH earn a Value grade of B, while PUB has been given a Value grade of C.
Both BOCH and PUB are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that BOCH is the superior value option right now.