Investors interested in Banks - Northeast stocks are likely familiar with Great Western Bancorp (GWB - Free Report) and Byline Bancorp (BY - 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.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive 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, Great Western Bancorp has a Zacks Rank of #2 (Buy), while Byline Bancorp has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that GWB has an improving earnings outlook. But this is just one factor that value investors are interested in.
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 grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
GWB currently has a forward P/E ratio of 14.40, while BY has a forward P/E of 18.52. We also note that GWB has a PEG ratio of 1.19. 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. BY currently has a PEG ratio of 1.85.
Another notable valuation metric for GWB is its P/B ratio of 1.39. 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, BY has a P/B of 1.46.
These metrics, and several others, help GWB earn a Value grade of B, while BY has been given a Value grade of C.
GWB stands above BY thanks to its solid earnings outlook, and based on these valuation figures, we also feel that GWB is the superior value option right now.