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BANR vs. HFWA: Which Stock Is the Better Value Option?

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Investors with an interest in Financial - Savings and Loan stocks have likely encountered both Banner (BANR - Free Report) and Heritage Financial (HFWA - 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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Banner has a Zacks Rank of #1 (Strong Buy), while Heritage Financial has a Zacks Rank of #3 (Hold) right now. This means that BANR's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.

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 16.38, while HFWA has a forward P/E of 19.78. We also note that BANR has a PEG ratio of 1.64. 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 1.98.

Another notable valuation metric for BANR is its P/B ratio of 1.59. 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.

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

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


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