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FMBH vs. CBU: Which Stock Should Value Investors Buy Now?

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Investors interested in stocks from the Banks - Northeast sector have probably already heard of First Mid-Illinois Bancshares (FMBH - Free Report) and Community Bank System (CBU - 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

First Mid-Illinois Bancshares and Community Bank System are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that FMBH likely has seen a stronger improvement to its earnings outlook than CBU has recently. But this is just one piece of the puzzle 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.

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.

FMBH currently has a forward P/E ratio of 14.07, while CBU has a forward P/E of 19.08. We also note that FMBH has a PEG ratio of 1.56. 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. CBU currently has a PEG ratio of 2.38.

Another notable valuation metric for FMBH is its P/B ratio of 1.38. 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, CBU has a P/B of 1.89.

These are just a few of the metrics contributing to FMBH's Value grade of B and CBU's Value grade of D.

FMBH is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that FMBH is likely the superior value option right now.


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Community Bank System, Inc. (CBU) - free report >>

First Mid Bancshares, Inc. (FMBH) - free report >>