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BANR or HFWA: Which Is the Better Value Stock Right Now?

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Investors interested in Financial - Savings and Loan stocks are likely familiar with Banner (BANR - Free Report) and Heritage Financial (HFWA - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

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

Right now, Banner is sporting a Zacks Rank of #1 (Strong Buy), while Heritage Financial has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that BANR is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle 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.

BANR currently has a forward P/E ratio of 17.48, while HFWA has a forward P/E of 19.75. We also note that BANR has a PEG ratio of 1.75. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. HFWA currently has a PEG ratio of 1.97.

Another notable valuation metric for BANR is its P/B ratio of 1.67. 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, HFWA has a P/B of 1.87.

Based on these metrics and many more, BANR holds a Value grade of B, while HFWA has a Value grade of C.

BANR has seen stronger estimate revision activity and sports more attractive valuation metrics than HFWA, so it seems like value investors will conclude that BANR is the superior option right now.


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